Kforce (KFRC) 6 Feb 232022 Q4 Earnings call transcript

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Kforce Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Joe Liberatore, President and CEO. ahead. go Please

vary call filings statements This and statements are Commission. and undertake results that subject in cannot factors Good public We the Kforce's based contains Securities upon These filings may Actual uncertainties. are risks reports expectations from current forward-looking. the to listed and afternoon. other and certain materially with assumptions are Exchange and and

statements. any duty any to forward-looking update

release additional find results about and our information filings. earnings can You in SEC our our

our remarks within published Relations have of our Investor we portion addition, In prepared the

website.

as On events items. the this investors aid a provided have be certain They performance and call, understanding additional substitute further we these will results. in items included accordance of as measures on The should impact clarifying discuss non-GAAP in items considered to financial measures non-GAAP GAAP. prepared financial to superior the the financial for or with not are

the non-GAAP differences press of between release earnings and provides GAAP Our reconciliation measures. financial

about environment, by and and offering associates. Let our informed our discussions with current metrics which the some me internal by is clients begin commentary operating

on by earnings have for mentioned and first largely demand XXXX beginning in prior technology we calls, XXXX continuing unprecedented we the of half in our As clients’ our driven experienced business

XX%, two-year spend the of yet growth environment in again a rate and geared our acceleration more which digital and fueled market towards benchmarks. in their business remote-centric unprecedented significantly The their efforts transformation employee approximately of demand engagement exceeded customer the Technology experiences.

level scrutiny exercised given uncertainty. the more have the and clients previously noted recently project the second demand a being higher half a had slowdown of our macroeconomic during We in by seen year of

on initiatives spend technology technology critical However,

for business. provides industries a and strong proceeding across our still technology underpinning is

cloud, environment technology coming technology belief and economic We continue long-term out of out. in Great the the Recession secular demand secular present and that expectation drivers in mobility, The the accelerated by are of advancements drivers have how of more than the data, demand irrespective plays strength in of an ever, spend the big to of unwavering

rapid the not all expansion to business enhance to industry business initiatives. changing. and employee facing strategies is Technology pandemic is The for their further imperative to core and only digitize don’t accelerated consumer all experiences. businesses optional technology consumer regardless see of has we of and strategic that

is business our from While immune not

where of the technology suggest periods spend impacts less economic increasingly flexible talent. and during economic resilient areas of that trends companies turbulence, is correlated than softness utilize other

down performance experienced X% XX% our informed XXXX the declines approximately is of Great market Recession in general XX% staffing flat technology in XX% roughly to market staffing by which versus XX% the general comparison virtually business business declines. was pandemic This our where to technology to where was our the and

Today’s XX businesses a believe announcement shareholders. for sustained It the non-core to allowed years of dramatically last of of also focus and virtually divestiture has growth sharpened organic in the our us has tremendous resulted that on debt and with clean to no balance our our success. a a amount sheet also focus to We return capital our and contributed

capital increase XX% business our our confidence an intention four increase the repurchase prioritizing in share and and in in is our in evidence dividend, fifth return years, our of forward. further increase authorization of in going

while improve. the stream X.X% less continues of and immediately preceding of of the of concentration our since XXX quarter been levels points com accomplished basis also Great We nearly preceding our reducing XXXX revenue business X% versus cyclically XXXX. revenues fourth have dot sensitive Hire Direct to evidenced in quality the than recession. to Recession has profitability in significantly improved This our by XX.X% the margins increase The revenues as operating and

beginning growth the grew XX% in year, the Technology more met the XXXX. an experience by demand XXXX. point, We that We despite half to was in second business softening successful the year extremely in To outlined of objectives on at for the than top revenues Kforce. our of of we XXXX we in financial began XX%

In levels. addition, by XXXX improved our XX% profitability over further in we XXXX

our integrated sales to advanced managed repositioning and We our business business. our capability integrate teams within solutions we highly advanced skilled Strategically, strategy positions. further the our FA of Technology more project toward

to on the transitioned work made a team Our hybrid to And our back significant we progress transform multi-year fully effort office.

Tampa. in environment across our and state-of-the-art all markets new our opened headquarters

top positions has Our Kforce retention their Great be This people that Office and and maximum flexibility distinguishes supported with Occasional certified the of in by them provides for Place is and workdays choice associates in our in to to in to improved one country. as of proud which talent. as trust in Work, a our companies for work designing resulted grounded technology. environment is a the Kforce Kforce best work destination as our

our As operating ahead advance business to attain sustain of the we further necessary back in and XXXX, and to margins. strategy sales our long-term will our office look to the digit to double integrated our investments transformation ambitions make we growth continue

be a the technology at talent companies in solutions other help problems we other complex simply are transform have is and space. focused domestic foundation and solve solid them market Kforce built businesses. no their to We world-class than would want partnering There with to

be have with the is consistent sense, remain forward path uncertain, so under we principles operating our been couldn’t the and successfully. will which In a clearer, near-term but macro we

highly share of tenured market We continuing near-term with may capture for place and to in solid, the the additional team the are expectation prepared long-term whatever and bring. a have environment

our market record track long a have expanding share, We of

market of continuing particularly performance. and above-market in deliver to intend on times turbulence,

Kforcers', who thankful cycles. I and be delivery and what teams this achieved our tireless has many to I in revenue our our team over economic all prouder through not enablement been team for incredible our sales associates from of Executive could efforts of leadership our Leadership the executing together am multiple team, have strategy years.

Financial greater give trends. will Officer our financial insights then now on expectations. our Officer, and as results will financial future into detail Operations provide additional Chief Chief our Kelly, our recent well as operating Kforce’s performance Mitchell, Kye Dave

Thank you, Joe.

quarter. the than fourth grew year-over-year revenues X% Overall slightly in more

the which primary Our slightly fourth for of driver our growth business, expectations year XX% be of with continues our success, the quarter year-over-year the full in ahead and XXXX. Technology X% performed growth of nearly of to

Our consistent technology run dedicated market. in an annual market domestic many resulted has business revenues. now XX% execution has billion the our rate of years $X.X believe approximately and total focus strong, technology from of over the our of represents our and We outperformance

budgets. of and are uncertain assignment our and trend second compared due to new becoming began the a extended continued has appear given clients half mentioned XXXX commentary, into environment. in year. Joe experienced also recent processes scrutiny As operating cycles of in to macro-economic around interview softening more slightly This and higher the to degree as more levels was cautious the attrition last have his activity Year-end trends the few be Sales longer years.

However, rates to projects, with to the Technology sequential our to even in average continued approximately economic cautious Overall technology to clients pursue continue improve become hour. bill per essential uncertainty. as they due X.X% $XX growth

growth scarcity that While near-term, may in highly the continued of bill the moderate pace skilled the we expect of rate

drive bill rate will expansion continued talent time. technology over

teams would with and our to will initiatives suggest bill and managed UI/UX, areas revenue program expect management. our and with improved engagements margins. Critical along digital, to economic of rates data they clients investments grow, expand that our environment. to continue technology solutions regardless prioritize project, average Conversations as analytics, visibility in portfolio Further, remain continues with of clients continue competitive the cloud, of significant to we technology

initiatives to multi-year in are engagements that to despite Clients our project to provide engagements. of teams continue and look to us continue any managed changes solutions Many we environment. macroeconomic expect the

this seek allows our clients’ feel for Our to our more solutions. us challenges. integrated to sales to move continue providing the leverage space existing we as Clients value people are solve strategy an integrated strategy sales, leverage complex long-term We to our relationships us to recruiters allows chain up their in looking

to consultants space. in solutions deliver and effectively the

of growth select with broad-based year-over-year seeing driven demand, still by diverse are Sequentially, Our we set industries. but was some softening. a

acute have This particular month whole reductions yet true the seen through any in as industry of vertical We demand. remains experience not a XXXX. first

a catalyst have be that will which sustainable, believe growth. above-market We large, diverse are prioritizing very positive long-term, customers of portfolio our market-leading we client to a spend, technology

disruption may or clients over long-term. well we dynamics, and diversification be the concentration our to expect with specific our in we shareholders industry-specific While susceptible to serve short-term companies world-class

Ian at We expect year-over-year, year-over-year grow digits first business to the the Technology due which late recovery decline This the business and repositioning of digits experienced experienced efforts. with continued revenues business short-term strategic sequentially, in XX.X% pursuing quarter January. project a X.X% mid-single Hurricane to low the support our declined of year our ended overall FA beginning we in we longer softness due in runoff Sequentially, mid-single our project business FA no the in which reflects contemplates essentially primarily are in to Our the a of growth client. efforts to

We down to to sequentially the range. to the in expect revenues be mid-teens in decline year-over-year and low mid-XX%

that of We in and our fourth improve excluding the bill business. $XX with to its Technology XXXX FA, Evidence FA continue compared alignment project, progress is average this Ian in to our in our support business the of quarter is rate $XX the Hurricane

quarter XXXX. fourth of

uncertain see due comprises curtail we intentional economic times. direct than revenue to grow our total investment hire to stream X% We revenues. As to this Joe in volatility less in business decision hire the typically made mentioned, of direct the

for direct are the hire first quarter. expectations Our in declines continued for

is business sustainable contributions We flexible scalability are model growth profitable We not reliant pleased foundation on and for the of growth. and make predictable, we to significant believe to best the our that are profitability. a this

in associate to capacity improvements The with priorities productivity to our population make grow. investments levels along we continue increase to continue provides to strategic process our in

investments continued evolve in project is This teams and meet make headcount have we we managed as Technology grow predominantly drive to share. exists, business growth. solutions in capacity requests investment our capabilities sustainable within targeted our and to customer While to associate

changes We retained people and significant and our have we environment. and best work office-occasional have to choice made our give employees our flexibility in supported

our XXXX ESG and through results our Kforce. Designation, that grateful would quarter, being and all diversity, reviews, I have workplace responsive our sharing in performance. the last They recognizes and amazing updates Glassdoor's equity helped Kforce thank promote mentioned to earned success. trust backbone impressive workplace with our related priorities. our quarter consultants inclusion the which of culture, to has efforts fourth As am candidates proactively are I and embrace our people and to employers who clients, OpenCompany along transparency like sharing for

the Chief Dave? turn Kelly, I now will over Kforce’s to call Dave Financial Officer.

Thank you, Kye.

share are XXXX of our $X.XX. of were $X.XX share year our Normalized as by per again nearly approximately revenues $X.XX Technology to related gains led XX% pleased earnings impairment share with approximately for market full billion per venture, year-over-year, improved year-over-year. performance in increased We X% GAAP our in adjusted business. joint earnings charges

quarter fourth sequentially XX were decreased XX.X% year-over-year lower of and $XXX.X year-over-year X.X% million revenues direct per basis adjusted Fourth XX to quarter gross of in basis points the earnings margins grew revenue. Overall and share due mix hire principally to a $X.XX. points

fourth business, the of sequentially basis XX.X% year-over-year. which margins our basis quarter, in Flex declined in increased expectations XX points XX met our Technology and points

For unchanged consistent the XX.X% many from in over scarce, Top XXXX seen levels. XXXX, have and were of year full Flex remains margins Technology wage increases talent we technology

years.

as due the have expectation We work economic Technology our declines, stability increases to clients expansions has in and through which relative of our success led to forward. throughout This to profile consultants we good perform. these the had business critical is passing our move margin our

FA a project associated our Ian a points declined lower in relief. margin short-term margins Hurricane XXX Flex of with as business sequentially result basis

forward to will quarter be to decline fourth margins are with be though Technology lower we to Overall overall levels, also Flex we to due expected gross expect seasonal due in hire revenues. business our QX, As payroll to resets. tax stable look direct lower spreads Technology margins

in slightly by engage sensitive critical stability relative increasingly for be to the concentration our their While believe success. environment, we margin ongoing current projects to the macro in the believe nearly may clients technology long desire clients provides over our to we that XX% more us due price term

the in bring and margins space business teams those We should remain project resilient initiatives solutions also that environment, in overall the this and managed expect portfolio. to higher

in by expenses, due driven XX adjusted decreased SG&A it was year-over-year, revenue elevated the points impairment extraordinary predominately Overall for charges, compensation, levels. which is as a growth as as lower basis performance-based by XXXX to percentage of

degree high a plans, have We within our variable operating creates compensation which of

as leverage slows. growth

cost square greater model, estate efficiencies also We have which office-occasional driving been at allowed real successful portfolio our XX%. our footage to approximately has us reduce from by given overall

estate will which office we in As to leases costs. further expire, transition real continue declines footprint, will lead the to to new

We in to payroll first due quarter. expect revenue to as SG&A expenses a the percentage reset annual increase of sequentially tax the

XX charges, expense. X.X% of of margin, operating in and over the for as Our basis XXXX adjusted fourth reduction quarter was the result improved quarter points the fourth as a impairment SG&A

effective vesting of fourth which XX.X%, higher Our year-end the in the anticipated benefit tax and adjustments. was because was on other quarter lower tax a of than restricted rate we tax stock

flows $XX deferred were as million impacted taxes million were under of by the cash settlement $XX.X CARES payroll expected, the previously final Operating and, Act. related to negatively

We slightly million and in for flows would cash pension $XXX which increase year-over-year. returned million deferred cash XXXX the generated been related Operating XX.X% have taxes, adjusted plan We in flows for our in terminated were represents outflows approximately million. of settlement EBITDA operating cash to XXXX, an payroll of XXXX. $XX.X the $XXX When

to through open repurchases. in in XXX% in excess $XX flows and XXXX dividends cash million nearly shareholders our in million of of $XX operating market

approximately on invested fourth was XX% return quarter. in the capital Our

mentioned, to our it per XXX%. Joe a repurchase our approved XX% in dividend XXXX, current now X.X%. As authorization dividend have Since to Board our yield share and The we million. share of Directors increased our we dividend to initiated is increased increase $XXX $X.XX

million, our In reduced million XX%. XX.X average XXXX, XX.X outstanding than from since have weighted slightly shares we more to addition, or

due since our of our have we million approximately capital strength in shareholders authorization repurchase the business. has flexibility in, and of our balance in financial our The we share significantly XXXX, expanding demonstrates both increase the sheet of to $XXX generated, to All cash and while our excess our returned dividend which represented XX% in

model. to our economic organic the returning remain confidence regardless We shareholders in committed growth our to capital of climate.

three which the quarter than the to days is XXXX With the and respect the XXXX. guidance, of first as fourth has quarter days, first quarter billing XX same additional of

per the in to $XXX earnings revenues be $XXX $X.XX. QX between million $X.XX to expect of be million to share We range and and

$X.XX annual First seasonal quarter per earnings share due of to by is resets. approximately tax impacts impacted payroll

does guidance or unusual potential occur. not may of consider Our items impact the that nonrecurring

operating to investments incremental our additions back-office put has even managed transformation in margins. and our drivers ongoing project excellent position performance teams investments continue uncertain Our We in to and solutions These include us our capability double-digit investments an environment. in selective business in long-term continued efforts. of believe and benefit are will important an in in our our the these to shareholders attainment make

has fully put lie prepared you in Overall, are place thank to management various economic we that entire the their extend like team, we our an believe our exceptional efforts. strategy ahead. to sincere for possibilities us I’d for and a our may On behalf of teams

would the turn questions. we to call now over like Operator, for

Mark Instructions] ahead. will from with first [Operator Baird. Marcon the question line of Please go Our come

are IT regards there a most moderate no a but but talk relatively thanks for more of the margin which and what of are if little afternoon impacts good on any little You seeing in verticals, you're like Flex macro are terms impacts, about side? bit color vertical, the which can know taking for which the the question. changes provide seeing my the of drastic you're verticals, certain ones you with little bit Hi, the just Wondering part, that a ones the I you mentioned is showing bit on clients that to by strongest, uncertainty? of more sort can

see back at, been indicators trends. nothing is significant years. one system didn't nothing being a select very but any for We that more client-specific, just up, last any out Mitchell. significantly anything [indiscernible] of client-wide Kye is the that indicate pruning there's it's that client down a this sluggish by of of to or Most clients, instance particular orders industry or it wide is job know, of look the industry indicate has You couple lot gate. weeks pruning of we We've busy would picked after is seen front-end in much couple

with us the of should that regards Got of or just the terms you course bit becomes that regards bill over an decline there do it. give challenging? in rates increases we think the the little we up rates think year indication more about rates, any slightly continues to with seeing And the environment pricing, kind are if you of the more in end could to how terms bill then bill moderate of chances a

Dave Mark, Kelly. this is

would think we've rates, So time, margins, of some bill stable we've we I if this been significant over from been much bill in relatively it's kind you margins there years, at look some increases saying pretty slowdown, anything, of say minor. bill a obviously you speaking, couple but last ongoing times terms I seen very in themselves. in terms flexible pretty quite the generally rates, in expect see is of stability there margins if if rates, is of stability

going to a think based I going seeing on as again, and margins bill pretty both today. to rates, picture you're see it relates So -- you're to what we're stable

Great. But question before, than And either buzz there impressions the doing with side? you for specifically lot that practices may only talk buzz know on there's -- can there's for to a the they're obvious. might since it's a I'm I of chat SG&A it Kforce and come the end increasing then around this that you going little emerged. if the to regards about clearly, opportunities or AI, to regards you your opportunities but leverage been to with with bit up month even less unfold early GPT been regards Kye, there has what to Joe which efficiencies AI really is more a wondering making around

going what's on great I'm question you've with of back Google takes kind It Mark. me a well. seen as That's sure obviously, and

XXXX recommended because our strategic takes the things that great arms AI on it evolving. most client going the superpowers, read one all haven't these book, you mean be, could called to book that and probably coming have with and I recommend you me a we to I AI it race if back So see strongly of

We technology us One, all sit innovations applied of here drive that and we these internally to has different allowed a lot both at to fronts. we've as opportunistic look on continue technologies productivity.

standpoint, on one from or artificial what it's a in are technology a drive do technologies, particular everything are evolving methodologies and type from opportunity COBOL, any we and as particular impact me dependent other our kind came the about great a of living of we back time type the technology applying any particular love got that right, takes things that was and assembler we it client firm, on on as business, actually didn't efficiencies inside it our front, Any became what going to So to into a chat intelligence and for is further various business business. do this about industry. not well then goes whether of of enhance I to lot greater first standpoint opportunity when that was the as I co-generation

mean I evolution. just is constant going a is this to is This this

change, there's time but then you that well, over don't So to that's wanted needs happens it question takes and to no will it as else to create it with deploy areas add? create how you organizations, within as going if anything continues have I then management well drive of as know, change that in terms technology to it really overall Kye, evolve, what in the other technology

Joe. hit you it, think I No,

opportunities. on fronts, will it's both market, of that So business terms create new in opportunity really it

early how apply tell it's on and front to and things. of just in I terms can opportunities then deploy obviously too internal we that think

you've course much the already footprint. the last this we just How one over side, should rationalized year? SG&A of then And estate more on real your one, expect

real we the the estate Actually, but the footprint that we Mark deploy and country. still XX% annualize leases got been about that, to about we've So, of about talking obfuscation deploying currently the real same our And and obviously, as estate probably across that we three footprint exist. we type years to do by as that footprint, reduced across as country. far plan

some got to go we've So there. time

it my So relates at us reengineering consistent CRM the in because front length in remarks, improvements although, tools, at right. we've our up. We're take looking our opportunity of right, and back opportunity TRM we've as the tools. of at started I over in of process there's pretty little years, to there we're tools, other and areas, about another all leg year, in mentioned be of been the productivity the that going investing last on a I time We've office office seen for business it's think we're currently our we and talked will looking to which the big always bit

in to as with to the business, relates we help it and overlay will as SG&A we of obviously, of as over the that productivity scale, we house the So an standpoint back-office from improvements continued we get grow, front well. improvements expect that benefits expect the time

we operating we case. there run said in be a that rate fair we is So to We've still margins. the operating that should margins expect, to increase continue as are we grow, think to double-digit past, which the expect

Terrific, thank you.

line of William comes question next the from Please Blair. ahead. go Tim Mulrooney Your with

tightness is Sam headcount but guess seen questions recently, for Thanks Tim. market steady is and right expected. now then or I particularly it characterize of were tech relative week lot came across much reductions about this labor How pretty the payrolls of start the than Hi, would you the much industry, IT easy last announcements last the taking quarter, state? to here. out stronger a we've to for

environment and months and investments companies those seeing bit think we've largest decade over in the in I regards last for constrained that selective and as a to some has over change doing hired of well does the a been supply, environment, it pruning appear In will pruning may have mentioned, you're are current frankly very that likely I that candidate of over changed and little in few candidate a the

office, see any that the I looks off be and we're we a really some for the like, still supply which I think be that seeing impacting those expectation go it's through of tight bit there. any also, selective going might are being are of future probably incremental one. bit candidate to don't There continue what and in our to folks supply looking is into clients a think that process out a And there pressure little again, to candidates hiring

overall, there. to lot of been a has similar change expect So very it and scene I see it's what don't to

let think expectation of perspective. those about So, We case, four big has transformation of just mentioned what enough is that me right, in technology digital Sam, means chain we and reminder, from to to data kind and do Kye talent, a pretty still as that years, so the the sets that application add. driver rate not Kye, is you scarcity areas about cloud, talk the might world scarce our average a footprint play. the our payroll things expect, right. at bill value modernization, analytics, high produced of like $XX-an-hour, a as is continued skill the you

That's very helpful. there. Appreciate the color

clients little in the bit on demand from behavior how the about what on in days months own environment, ahead side expand and both a your maybe have behavior as well they can any side their hearing here? process client indication remarks, in from the about they're touched on thinking more but staffing given You you this prepared needs as client these you're this

years, in we've last that I but the on there's As anything budget two more think cycles, we what not seen around prior unusual that. to mentioned, there that is more it's scrutiny scrutiny

of areas the in investments. continuing to committed much very strategic are clients However,

they're cloud. to digital going the example, to not If For stop project, migrating they're doing cloud transformation. a cloud,

the the help continuing positioned wins well in clients some with had the strategically company very new year, migration. we're of seen areas we in cloud to into to good believe a recent productivity. invest. we We that We've them to a first create had come help So employee win as a we are right tools help where with care health improve recent their win them customer the

in space, to there. continue the see investments clients think we're I So playing we

critical far decline. When clients Kye industries Recession, remind pandemic Great robust within disciplines projects more still technology other significant the funding critical right. than just was in would I'll spend had the historically were true technology the I we Yes, you that a revenues add, flat. recently as actually been other and staffing have mentioned our and during just obviously

what of to growth a subsequent of significant reflection So of prior that that. technology and kind is then on in that obviously, seeing to we're top and

So a the stream lot regardless technology in of revenue here of climate. resilience the

I appreciate that That's both. helpful.

there. I leave think we'll it Thank you.

the of ahead. line Tobey Please comes question next Truist Sommer Securities. with go from Your

Thank can to project juxtapose you profile, teams existing if solutions, basic you of businesses. it ask there maybe you. margin us dimensions size compare specifics, about some it kind managed Wanted color and and give either with not along

description you're talk what understanding would on get you things us of kind what about where help any that things maybe nature, of project take you're things a doing, overall You of will going with versus won't, of you helpful. kind better that be Thanks.

value who approach that's from competitors to we what that Kforce because marketplace leverage our bringing our we view all are, of can and this to we've in through is taken the within integrated alternative Yes, hear you some we how maybe direct here. because the a thanks sales unlocks Tobey that technology what market, relative, our with relative to integrated set little strategy, we're focus right, really that into solution capabilities DNA our of

we've that think we margin that average, the profile the that type I moving this so roughly points. stated margin our value on And you XXX when we're higher the additional and because XXX do expansion in about past and more up of we go the work, the chain is we bringing chain, value know, basis been of basis roughly further points up

data of off drive an to at ones we're data why of we often do we an also each going and In different working when we project. cloud, of areas phases the allows their needs has of with different other, overall the a that the upon and when footprint get play initiative to focus client in on teach that's they engaged the is terms us cloud it after because going macro these them areas the I so mean based reason and had key and areas on that various honed part well get other because articulated on

is in that a from roughly XX than duration standpoint, this over our a contract And typically area spoke average about. we duration longer efforts that

So multi-year, average these are but they're be some of of on see duration. projects we a going greater to

of I a particulars. to little want bit know you Kyle, more if don't the talk

different Yes, see for Joe we're from to we're or game within in a teams a is a want We have longer bring various said, whole continue through areas Tobey staff as do for on whole clients to lot something Managed They see spending somebody demand to -- we go solutions on look managed the to we teams. the of see people to team. to providers. want duration. everything pot

And us, great space. we're strong for that it opportunities to see demand continuing and creates in

when that And reference the Or is at line bottom the GP that of level? more at level? margins, you sort is

sitting at Yes, profile. both, we're Tobey, is really answer right? the margin higher here So here a gross

right, expect, it more as that mine, deliver we at you'd translates. As

So it's an business important us. for

you bit. Flex conclusions a sort waters to that teams to whether of Thanks. in Okay. gross -- contract we see year-over-year trending And Perfect. did on start at Flex margins basis quarter? the look do I'm the a model, if and margins know Where muddy little in gross If reconcile numbers. those and extracted way the draw trying from we just kind don't that managed and of other the can because I things you

of Yes, couple things. a I think

is way flat. So very spreads down a if they in actually I significant not we And unchanged, they're not obviously, in do sequentially, we anything that's mentioned, the impacted we're were is I that at. where where we're from payroll we're focused So quarter. buzzword as But think I've right? get look otherwise. here looking were to business, margins, that We're really seeing the any full they I suggests Technology that I minor first as think the look Yes, by stability. change about for in should taxes as year at

I will And business When Okay. but you the recessions and curious, you ask I'm on three to in going XX-some we examples the this you last question, I'm then how years. perform, you about in for think have, touched guess, plan another different.

planning for your use ones business? make Recession you bubble, the the tech the in are inform have depths. for got there Which They from peculiarities, You've all you'd adjustments on we that Great different any that do normal And Thanks. XXXX. that to recession and a investors was encouraged may pandemic absent pandemic unique in not. a hear spending XXXX some maybe the unique because IT, often IT

of environments, question. same you you've telegraphed I No period great react has all as ever unique think more And this -- right? the the are history. think been most in well, a if this gets because for been around recessionary truly a it's two one the all will we're be coined, while. space Yes, the know, recession they in And probably I And differently. and

at markets By I So although labor if available the look when would then you amount and extensively. as you ultimately during I way, labor plays happened it recessions to you say, skilled in impacted at last XX if areas this we course been have I out what impacted. severely, jobs around different look impacted years. back especially if of had at those the the high -- labor financial one never this two prior of crisis at believes, you the even last than way, it this go when what's They seen should just We've or over talent. of say, other market. the more the is one, the the are say and were the overall But any contract that impact recessions, significantly the what if they're just pool really look rather of so probably time the at look pandemic, look

marketplace. you're about we very when here we're mean, to focused outlier an supply/demand, those feel know, in fronts. still one-plus And have person going you terms which of been all on technology, the sitting has as good always in per I job

and elastic So a flexible have we that within throttles model very has natural it.

We have variable structure. a cost

So readjust revenue were of we those as even of -- be was because business things we although financial of to the leverage any get the -- and naturally types experience and have there lot and plans really that things impacts, during tight comp if pandemic crisis, were to a during of phenomenal our things. it didn't

prudent that of debt, in spot we've balance been staffed virtually feel very out We've a we the sitting So here great pandemic. sheet. the coming about we're pristine how with no

based We over-hired. upon haven't need. we So hire

when we no we're the we mean, feel view where went now, strength I right be through we a different pandemic. real place So we and in of to blessed than were

throughout from we're a from operate operated of get position the strength if strength position and things tight, to a We other to ourselves. position pandemic, of the were for going play and and side really

XX what or for we the been are up been around is I've we've trying difficulty guess or matter look years how for we different through how corner. we today, and things we been any are are that and cycles, stronger we time than here those I at set positioned to four no So be And key never positioned prepare would now, better the as and operate? comes

let dividend. me good the mentioned buyback. various terms on a amount point bad, We of and that in right? Tobey, just made a our cycles, increased we increased of authorization He Joe our significant managing amplify through times had In we So generate just cash.

$XXX coming I this cash year. certainly operating think in in excess of million, flows

very have the thought to cash. And expectation that going any how of consistent I so been we've have change don't we about either. that's that use

is this business. piece the managing think how about about the last of we So kind

without would you kind resilience at a If When contributed XXXX, that question. the think economic my of on similar and if Okay. have back to business that look pandemic you features, that differently? I IT's pandemic perform contoured to features were double-click we do unique there unique a of industry the contraction sort just

Yes.

were for think at I that slow they how leveraging I business, was call businesses pandemic in after data, the to their moving out, wake-up think digitizing organizations looking their many a cloud. coming the getting big were

I think businesses. for call huge that was a all wake-up

an that acceleration technology. So created there no of investment is in that, question

did However, moved the is it of -- adoption actually technology it years. it by what forward also

sit here has now having had, Kforce traction or we've can fully implemented. tools I various but embraced trouble we how us and that with at other I were mean, we I leveraging and technologies years at we're how look and teams deploying that look already getting say but I exactly many at that whether it be

you acceleration, in technology excess has marketplace that of there's that created done. what hear So And in an head demand, these have the delink really to to It comparison you reduction right? of question. some no

they having the to business, more competitive. is to everybody these figure move to things, monetize So and their do how be out leverage digitize data cloud,

it So these option to areas. an in invest is not

I see and economic we think need So the of pack continuing tougher climate, on it car backdrop. in do irrespective areas see certain mean, a if some technology was I we economic what these have skill mission-critical they to to on, that sustainability risk imperative projects long-term standpoint. these and do at this or work from areas competitive But absolutely. their have companies putting initiatives, they're business a

different. that's I'd So say what's really

but everybody would in years we that more I normal what it. where post couple mean, are operating the environment scrambling consider environment is be is to healthy way a pretty of of I those versus was a look pandemic, as we at normal well

much. very you Thank

next the Your Mehta Kartik Please come go question line will from ahead. with Research. Northcoast of

any you. a in of you change? little seen you're bit a there seeing maybe Have all been the Thank softening. change landscape at competitive since Has

comments, to we the everything said higher slight the softening a in holiday think did the little the bit our pushed at than I opening of as we way fell it bit. out a a been just end attrition And There's year. numbers little usual see

it, latest of the will in we couple with everything. back indicators mentioned, BLS out that be last coming seen, interesting clients of too, sluggish seeing we've pick have front-end was partake seen So the weeks, like and It numbers I up.

a macroeconomic clients some the it now was scrutinize positive wondering for indicators think I is and of them. there's think I going, is where longer taking lot but to

landscape? Yes. also asking you're And assuming I'm Kartik, I about, the competitive direct think

Yes, correct. Yes.

Yes.

standpoint smaller place from things we seen compete some are look we've see more the typically dynamics So competitive right? local when company bit operators at remained constant. seeing players and a the a by the and of players little And that pretty evolve They're we biggest bit what larger is have feeling we're way, single that is landscape they with typically what little cycles we competitive the becomes is with, the this the Probably pressure. the in space, a dependent. the difficult, as more environment

balance lot play they as up credit really of going and And room types with you have don't sheet. defaults things, nor a they at of look do to on those have strong

share I standpoint, this out things more always market and market in, if of any What's going which to or operator throughout don't So that's the And we we irrespective competitive and out went to opportunity. is back the be where the operator than different you being if suspect look to regional course is tougher end just year. come historically, landscape go on of provides back Kforce's mobile shrink, at were why happen performance, how of our going the this foresee plays XXXX. stronger us I

were coming And the some then and you've sales obviously talked cycle really a pretty comparisons tough good. about lengthening we're bit, little really where off things

If last would that levels, you the years kind really how that strong. were of pre-pandemic that compare than to two compare rather

to pandemic surge was before there in Just to big demand? comparing this it previous

stable what very still saw We're during to pre-pandemic. we

a dip We levels. haven't those from seen real

Really much. very Perfect. appreciate Thank you it.

with [Operator go Instructions] Your Please next the Riddick Sidoti. question comes Marc of ahead. from line

evening. good Hi,

update Certainly, as to this. in to appreciate far capital return the terms as do shareholders. wanted substantial the that's I So first really of like

sort you're sort to was the clients, whether at that seeing as as much we you're with with wondering quarter. I trying your in well company to the third curious certainly actually But not things this maybe see. your it's look was as what changed different a I to on as that's how bullishness seeing last as of vantage. is from of, to -- from sort this call curious I when last nice I So slightly But just if or the was kind guess, of of

necessarily over there altered the in necessarily sort bullishness, is -- there that of months? think signposts bearishness time that's changed outlook, you frame was seen or have mean few that been you've anything that your last I any

think the over quite that management to I much and periods for bullish our some our think experience heretic a change adjust are was been while rapidly to XXXX than of early think and ability had learn deal how quickly, going changed through, prior we were to it of mean, forever so changed we've and very we those I that. within part I trust the I say now. also to a Kforce, it organization with Kforce, different I would think I it move teams time pandemic, in go into because it's think time to Yes. I changed has the

with at and mentally course really I because face business of in situations challenging of that me accomplish blown our game world years, just real the team emotionally probably what and teams look then been And I'm anybody faced, away of shift when ever model our our some with applied, Office cultural Occasional where in with taking to real place how with we've the last the our three just end has able the most elevated also clients. has with our we have today over and are excites that technology the accomplished

mean, I October end no, attitude spoke to year. you back of since some nothing We've this been So for of changed has on time. we last quite

we have why we is going to playing right that? We and play we do to and Because offense, are offense can it. team continue are and to the

impact last there increased Excellent. installed either if year. or things? they fairly seeing? changes activity or was has benefit of with business similar curious I of from I saw? any about much of the was at were or way to some engagements of whether you're clients, what if or a M&A as not to or So Or obviously, wondering that dried of up is talk M&A you we looking that was -- with transitions driving an been Thank we know a of lot your little sort could that bit sort you.

No.

are We impacts significant business haven't pretty that. Clients usual. seen from much any as

many, we know, in M&A years. any many you haven't done As

largest only X% of We have -- revenue. client but there makes are clients couple our a of up

through not an M&A now clients a impact some that have but on seeing. going benefiting couple right We it's really activity, them we're what we're from of

Thank you Okay. much. Great. very

Sure. Thank you.

I'll Joe Liberatore to over back this at call time. remarks. the We further have any closing no for hand questions

the first our to Well, our support consultants Kforce XXXX. efforts forward in interest after of and talking thank to look your allowing us you trust to privilege partnering your I'd with clients Kforce. of like quarter for you Kforcer for to and We you serve extraordinary to your and every you to and our and say again for thank you.

today's meeting. all gentlemen, Thank and concludes Ladies joining. you for that

You now disconnect. may