Kforce (KFRC) 31 Jul 232023 Q2 Earnings call transcript

Good afternoon, and welcome to the Kforce, Second Quarter Earnings Call. My name is Brianna and I will be your conference operator today. Please note, that this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. Instructions] [Operator

turn to now President Liberatore, call CEO. and the will Joe over Kforce’s I

your conference. begin may You

Good call and with and statements results in are commission. subject afternoon. Kforce’s forward-looking. change risk the may based are This to and the upon security contains vary certain public materially of current factors uncertainties. filings filings assumptions and expectations from are that and Actual statements listed These reports other

cannot statements. We any update duty forward-looking any undertake to

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

addition, prepared In remarks our investor-relation we website. our within have published our portion of

for are quarter believe an the results for a of prepared clients, industries the we uncertain broadly being continuation market-leading taken across the possibility Our of the second actions by slowdown. and they economic ensure environment, our reflect to

This into recession that to our informed industry and aggressively economic metrics, address data clients wide-spread March Reserve Federal with inflation. U.S. There persistently the raising severity by economy frankly, and rates began XXXX discussions a concerns and in have of fall been uncertain other points. since the expectations high view is internal would

The likely XX curve going of a indicator very more continues a has significantly to strong which yield inverted, than years. been back recession be

layoffs, continued several resilient labor We has remarkably the of levels pace over markets an slowed, seen be large also of low have to with and collapse the experienced this of the of level increasing hiring institutions continued financial time. Though historically we unemployment. have

some possible to inflation, increasing a the have soft-landing there in been economy. U.S. discussions recently, suggesting indicators moderation significant More the of

they significant We broadly and and that to this to an trim points my don’t projects these economists, is causing in create investments of the restraint selectively return. initiate not macro-environment. sharing are believe data we immediate exist is exercise number technology the to articulate that in existing new uncertainties a companies, speaking, While point

though quarter we exercised This client quarter project quarter. new mindset. are in seen clients, in awards, companies, is the speaking, not still the we in and second our generally in continued The change restraint or including have seeing expectations reflected by being second broad performance third any and results our

technology-centric While efficiently in results we are structural are the them became our that Technology costs class, produced key our our the in without our levels focused, Firm that to clear that strategic and we to business align top due adjust platform revenue of compromising to needed operate of continues to investment with lower it to experiencing initiatives. us

are macroeconomic the never team difficult impact remarks. Dave taken our While these Chief of actions. provide costs associated will Kforce’s his these and us benefits and insights business actions to into the actions in Kforce with affect to make take that Kelly, lightly, Officer, tremendously these our uncertainties Financial on drove

slightly performance second revenues, our share to lower-than-expected the As were revenues quarter, was the in overall per earnings low our below range end of the guidance. Despite of within guidance.

As we remain belief future, steadfast areas. our into in two we look in the further

the in very the persist out. demand, the environment plays irrespective secular future and in that in believe we how intact First, economic technology long-term are much short-term of the drivers will

us technologies The both the it Great including continue. recent have the technology, strength of uses demand of the in of and the that significantly XXXX clear technology Pandemic secular coming out garnered, Recession remains accelerated drivers will to headlines strategic of GenAI broad and and that

begin to is caution investments believe clear. today, heightened in with desirable this prioritized once backlog the resulting macro we acting are of uncertainties will clients be While that tremendous

optional not competitive simply and are climate. disruptive investments in today’s business Technology

clients business at in for core resources, our problems scale, to industry. is and Our every rooted critical competency our in provide virtually to and identify solve ability real-time

a than as part on, be we domestic managed be would clients team other is to staffing strategy managed assignment, to engagement. market meet or to with partnering a in focused us integrated needs flexible want the project other Our also talent their simply technology our traditional There allows space. no of solutions

to focus we the outperformance. our market Second, continue contribute in to expect sharpening our to

We help a with foundation solve businesses. to and have world-class Kforce transform are partnering competitively complex problems them at companies solid built their and

shareholders. Our expect is continue capital this clean, balance return us flows providing and cash to and great our sheet we strong to significant to flexibility our

We share. expectation the place, capture have market a with solid, highly additional continuing tenured to team of in

experience through Leadership may Executive through cycles whatever ahead. multiple to team Our the navigate lie economic and has been has skillfully

A in CEO agreement announced addition to success executive a non-executive Dunkel, time, of role into his our Chairman. role, to Firm that provide December our employee Board retirement plan At reflection of founder the entered is as support continuing the and preparedness as his a XXXX. Dave our transition initiated multi-year in a in

The immediately, role that effective to Board Board solely Management the a in Executive Directors confidence as a those transition his of determined of that is success and Chairman I necessary. want and sharing the the to this and comfortable and the of Board now the look transition has personally Directors. this accelerating and during thank due has it I for to no Dave continuing of the transition it team, are to transition forward engage to rest services guidance Dave longer wisdom with

give Dave Kforce’s management and current as financial as will about well Chief and experienced is remain Mitchell, then additional well the trends, Officer, financial insights macro detail recent our future excited Kelly climate our prospects. our expectations. Kye will on we highly results future team performance provide operating greater our and now Operations into Our very through Kye. navigating

our declining year-over-year off comps, where business prior difficult approximately year with QX solutions very in X.X% grew our Joe. technology business XX%. technology you, Thank revenues revenues in XX.X% Overall and staffing declined

in our starting new more technology As caution Joe clients than anticipated. mentioned, investments we exercised

to continued existing they Additionally, on selectively trim projects. resources

terminating said, large that experienced have With existing projects. we clients not

seen While caution client more across largest was XXXX, in has been our the prevalent portfolio our it exercised being in clients.

by relative usual stability April in a June. a slight saw and As we continued May than weaker softening some in followed you at which trends overall quarter, was within look after the QX,

last relatively modest ends outpace trend, assignment assignment. the throughout consultants continued we April a the new second of declined technology consultants point, months and total slightly on quarter, that the engagements an on the the guidance experienced on continuation During levels To resources to quarter of and two number of from that declines number placed not reflects yet assignment we have our as point. in of inflection seen new

hour, within Overall This primarily workers stable overall the In and skilled highly of slight and remain our and on X.X% proportion increase bill rates average at due higher-skilled driven record improvement. increasing near sequentially business in in per bill X.X% mix improved year-over-year. rates $XX approximately talent assignment. is This to levels technology or our the which the show by of is remain primarily near term, we expect project that average technology mix business. teams increase will managed engagements an technology

we our will continues work service is in to rates as of in true higher especially ahead, average bill long-term. to value continue the Looking favor This rise. offerings believe our mix

on focused initiatives project and digital, technology of critical remain efforts. in and cloud, areas the program UI/UX, modernization clients Our management data analytics,

is new they leading industries, critical the for to of multiple slower. Our initiation wins their to starting committed projects are though across clients organizations, pace tell us mission

technology experience, based to clients on becomes their historical investments Although the expect caution companies we project exercising clearer. increase landscape are their once shift priorities investments, currently our swiftly their macro-economic more in and

staffing include consider solution us talent teams to solutions. project expect beyond access broaden to clients success our requirements. service to offerings to managed essential and their as traditional project their see our for cost-effective the Our services Clients right and a

we have relationships strong the on capitalizes with strategy integrated Our companies. world-class

project We that are consultants clients’ solutions our and to challenges. effectively and teams address our utilizing sales, higher existing value recruiters, provide

Our in long and includes sustainable, client portfolio market-leading diverse believe customers, drive which is will market above term. large, performance the we

disruption world-class or diverse companies industries, clients client ultimately certain short-term may will our of with shareholders. our occur While benefit base

a verticals, energy previously exception about declines of We our software we attention and industry. experienced the to garnered had industry. industry trends hardware sequential the our basis, in large the sector saw reductions. sequential On utilities most due workforce and stabilizing with in This technology relative headlines of

digits sequentially Technology the decline a basis. in contemplates the to mid-single on third-quarter Our our teens revenues year-over-year guidance in in decline and business low

Our longer environment. we the of year-over-year. efforts more FA to repositioning a the sequentially approximately impact The year-over-year business no as due business XX% macro challenging supporting XX% and well declined are are as declines reflect

We year-over year down a XX% to sequentially in basis be digits and revenues in on third expect approximately the quarter. low the double

support quarter $XX of second FA XXXX, in Technology We first bill continue our over of alignment Evidence $XX to in compared X.X% up is our rate second average that the business improve is progress quarter more with and XXXX. its and recently the the XXXX of this quarter of to our business.

we see higher our performance. surprisingly, set skill Not relatively is where better business

associate revenue between taken strike necessary thoughtful productivity to and balance have a measures expectations. We and

prepared most when primary time, well on targeted solutions improve also we market capitalize our to we investments associates, same project making it demand the capabilities. on and is ensuring that Our to focus productive accelerates. are teams our managed retaining At are

am grateful dedication, by their Without with the that It displayed consultants to I creativity it team. our fills us. doubt, me appreciation a drives I in unwavering am dedication and resilience place for truly clients, candidates that truly commitment is trust the our our and witness and immense success, and grateful. incredible

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

Kye. you, Thank

Flex XXX earnings hire Overall increased per XX points Second $XXX.X the $X.XX. quarter and of year-over-year of of to mix declined lower quarter margins basis XX.X% combination a points basis a a to in revenue and year-over-year revenues decline due and sequentially the in million XX.X% second declined share gross were margins. direct

to flat Flex that short mix. clients price margins declined declines business bill-pay skilled due bill spreads in were healthcare points rate qualified due year basis heightened highly higher to our in costs Technology business sensitivities changes modest in in as remain candidates Flex XXX margins and year-over of modest sequentially on supply. XX.X% Technology and increases understand

have margins year-over-year stabilizes. several is experienced Technology The of typical seen over the we typically we decline margins environment as Flex in and quarters we basis prior the last on see macroeconomic fairly what slowdowns; that recover in a

Technology stability. in Technology talent a with increases relative continued more has XXXX margins wage for than the additional margin longer been our reference, As and to in and were see consistent business we decade XXXX levels. scarce term expect XXXX and over

Much margins of margins as has repositioning sequentially due the now business our points efforts. have are XXX we mix basis significant business over three business we improved in these at points Technology has to last pursuing of longer to that the like basis no years majority Flex our stable remain nearly off. our anticipate increased XXX FA and fairly Flex run levels that business, improved

XXXX. of due during off we the As time QX, spreads summer decline to we in Technology slightly, reasonably the third in experienced primarily of quarter with to to look business paid months, utilization what expect we our forward consistent higher

As QX, this beyond overall we us solutions margin to including managed are ongoing stability. support higher typically their projects to increasingly engage and as critical we success, that look teams margin clients project for expect engagements opportunities,

of SG&A expenses decreased as basis percentage Overall revenue points a XX year-over-year.

our performing commissions. XXXX very plan Given compensation structure in exceptional XXXX, and our significant associates rewarded with our and top bonuses growth

levels, our historically generating overall those off performance-based costs. through coming costs leverage growth very With lower SG&A high we in are compensation

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

areas continue savings In other three reductions years, expect square this next generate overall of in are transition over discretionary to footage. leases environment, to As our office additional to we two we tightly spend. remaining further the also managing from we

X.X%, was margin operating the our at of middle range quarter second was of which expectations. the Our

Our second approximately quarter XX% in million on the was tax XX.X%. return Operating quarter. rate the $XX capital invested flows cash second in our were was effective overall and

very We’ve capital debt with million generating be shareholders. to expect in We our sheet had operating have a history little a to of $XXX in XXXX. more long and flows than balance cash returning

increased dividend have our XXX%. it in we initiated Since XXXX, we

per XXXX addition, from reduced more of XX%, In our at shares we approximately or weighted $XX.X outstanding $XX.X have share. an average $XX than to million price million since average

our generated, cash in we to levels. which capital million since significantly have nearly in, and growing shareholders approximately XXXX, profitability improving business XX% represented of returned has while our the $XXX All

seen nearly we operating past to we’ve quarter, a and of returned the through shareholders continuation over is XXX% flows second levels years. our of repurchases dividends. two the This In cash the

regardless plans economic are Our the forward capital committed We going returning to climate. remain unchanged. of

dislocation the have and we to stock between us our aggressive in under credit a our there performance shares. provides opportunity the sheet future if balance financial more valuation repurchasing the and get facility is of our Our expected flexibility

the third third and which XX The quarter than than days, is quarter fewer quarter has the XXXX. billing one fewer of of one second XXXX

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

and costs some in contemplated immediately we align his reduced to not remarks, that of our impact opening near-term in overall current critical this changes the revenue better month implemented referenced support our do Joe reductions These commitment firm expected very difficult As to with levels. investments initiatives.

levels overall at seeing Contemplated well previously been seen, reflective $X.X return actions. revenue is these we related guidance share per remains our performance strategic Our $X.XX a of quarter third above these investments. operating it or previous from million which approximately what are the charge is had of to in

be Excluding of $X.XX range this would the and $X.XX. per charge, earnings share

$X.X We will from costs reduce million actions these anticipate quarter. by $XX [ph] current operating that approximately rates or annual run million per

the from savings QX We timing due in partially the will to the of actions. benefit

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

excited short-term growth, Looking to grow. while that expected our help we and efforts investments beyond and position position to us in for necessary strategy and double-digit about extremely deliver margins back-office as above-market the make a long-term continuing transformation to operating strategic growth in put our remain attain will integrated prospects continuing we uncertainties, the macroeconomic drive

thank like On behalf of a management team, all for of you efforts. entire to our to teams sincere their our extend I’d

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

Mark first Your with Instructions] comes Marcon [Operator from question Baird.

line is open. Your

in a I afternoon. year, from of Tech Joe they about clients, a and was larger the clarity that of when Kye, if their some your how thinking remainder of the with what talk think are you're to good get little you might could they they about Flex outlook. little and Hey, more bit wondering just hearing bit more terms just regards

have – this you've countless its heard Yes mean, Mark, in the already. I forecasted ago, mean what know is clients to you I'll we're have continued that believe how this say, Joe. we more I a that for nature. times probably is in respond [inaudible] well shallow a say would and and given I been, been started type about that and our year activities in recession, preparation of those they've times

I Xth this I time, seen different will around XX-year be sector know thing in but historically, I've been my the and You've think that some for and career. if this this first my time cycle don't it quite is

is are of they are contract next happens first start their they their next is, is of workers, things staff. whether they to flexible look, thing phase, to a bring when they start whether What to do staff is believe down forward then if that pent-up some to and first on flexible the start back to or on, once the The full-time have up use phase, organizations cut tougher, permanent throughout reduce start and address they the cycle, there then they they back that they confidence, built get resources oriented. quickly all start staffs demand re-hiring the

market. in like in time don't organization, corner, the They So of XXX around crystal most we and the Fortune and organizations some predominantly are that the you sophisticated one else ball. at our wait are in planet. No has on a – see this with where point what's clients work we the is know everybody we see they know

they operating caution. So are with

good unlike every been The guess past, with been wake-up more the has call. that an news just of abrupt, really been I've has cycles about in some is, abrupt the I cycle, which involved

to organizations very react this caused the think foreshadowing of I has differently.

see coming So projects positive mass a of with usually halt. abrupt, and when ended I'd complete see consultants that, exits it's say, the to we we and projects

trimming to along, period. We a moving them is maybe seen that keep we've basically around in bit really this seen edges deliver longer albeit that the time little cycle. a haven't All projects

have you add. color Kye, I don't to additional any want may you if So know

you main initiative. is taking get mean, delaying No, a Joe. staying be covered are it, I them. think they are that's thing They aren't we’re the seeing is, their strategic canceled. I longer with projects done, on but approval getting may still path to They

efforts, cloud what we’re modernization lot things, definitely types those of them look back are they a to trimming future as see seeing they wait holds. continue We’re in the but migration, and seeing at

our what terms means on technology. talk year-over-year we spending seeing when [inaudible] of microcosm, are back, note, churn is a to more important similar, in which we're Mark, we of with clients basis

more building. of have And this now. And playing other address by right and have backlog in the managing than is through day projects pent-up to projects we because just see demand changed. technology We to capital patient way, we climate, excited get the That's able that be for we every has side. that the with our why about need clients, for this not and

also and from as operate the degree revenue demand during always has are ended of all but these from a being of just organizations up a higher, this the standpoint, lot see business up having with a take Our of standpoint, peak, caution. to profitability built we not times

we quarter it relatively for should answer close about up or think compression? going I little what of costs. a the QX bit margin expect compression. to year How to terms – little to bill a Can then about of regards – more the to in what's how QX? seeing the a a you additional obviously we ended terms health this some You guidance there. talk in appreciate quarter? And in QX Flex some Is past of like ago be mentioned the we with QX? bit Kind should bit or more there's addition of from much pay this implied going to gross and implications what you're little that seeing

is Hey Mark, Dave. Yes. Excuse me. this

technology and talking we're about obviously think, I yes, So here.

the stable and about we sequentially. which right, higher bit quarters, year-or-year decline we've so are spread a in seen themselves second couple of pretty the care health happened saw in quarters ago. that little last three the You We're quarter costs

expect and overall technology again for and look think touched to up bill spreads for need to margins resources, your we the sequentially. and note, flex relatively the on critical stable. as forward, Joe Kye And I both we to be point So, important are rates and

So there’s still us. there demand out for

that as not that we're here bill view good seeing sign a environment we in we as declines sit So slower bit a in any rates.

have again, and stability expected time for viewpoint said spreads not margins has we our a So long and changed. in that we

you actions. then, And took Great. some

partially only of feel like know up run cost You on gave costs from you rate you benefiting here it What quarter the the us to reduce in going quarter? what be run rate your third coming – but the quarter. that's percentage for full that a or would per a basis, would absorbing here sounds reflected in end

so maybe prepared just I'll remarks. what in Mark Yes, repeat I first said the

about that the be cost to quarter. is savings today. that taking, million, actions just So reduce happened actually annualized million frankly which to that $X.X expected structure is we’re per about full $XX are The going

have we that. that of we about So two-thirds benefit the will from quarter

it's I about itself, the that As impact reflected impact, about $X.XX on costs. SG&A had a quarter, X.X% the mentioned, charge in so

So two-thirds now, we're to as benefit that full see obviously, going on benefit basis. we'll we a get move but of quarterly forward the

back Great. I'll in hop Thanks. queue. the

Romeo comes Trevor William question next with from Your Blair.

open. is line Your

afternoon. Thanks the the taking trends for quarter. throughout to Hi, demand kind good just touch call. of Maybe on first, wanted

I similar those QX down to June if of levels that guidance I kind think a June, guidance, was May and stays run in kind kind quantify to June step slight of compare a mentioned stable. is revenue of softened was in softening way and the from of it or maybe relatively to maybe more a of then how June. June the rate? April kind There Kye had and the is much demand demand there guess, of May you

we They about being again to which and But of that'll have things but of not but seeing delaying out we they encourages canceling really are length levels selective. me, out cautious decision-making its think speak we're projects, come are lot of projects. process higher I again, this, when too. also as stretching approval, clients, been they are them, are generally a some more they they Yes, talked just the

demand. about So the necessarily just I don't it's think

couple selective I think and client in what process, looking we years. of saw it's than about candidates really of in speed, approval that more more lengthening previous the at

Kelly Trevor, at Yes again. this Dave

of to just her So prepared as comments kind amplify there remarks in well. Kye's

was seeing putting So June, still projects people but we quite So are obviously at we looked seeing that getting that slightly no into those projects are are exceeding we're and as that new May, slim, there question new marketplace, demand of in There's that out very assignment. we’re starts. those July, the completed, we're right?

change as contemplated So quarter, the expectation. third guidance any we in to we that make didn't

we guidance we take on touched Joe Obviously, how it. uncertainty. just approach built a and third-quarter to that's mathematical Basically,

thanks. reductions, I like And said, just make. difficult on to was those I helpful. following-up That understand Okay, the are then some cost decisions

structure the your and here, right-sized happen even assessment you to guess macro kind have from room of think the much is might did cost reductions whether on where wanted point at how Just for you worse get to fully and you able those further to if get this cost make cuts? I be might

a would of comments guess that couple I I make Yes, right.

are in capacity, so will the sure I reductions. understand that us see that, when important how think appropriately it strategic to you and well long some cost we've made you to top think help can things it’s structure things building maintain about we to we invest term. in as a for think made continue initiatives, line to slower. Certainly as Obviously, little we're so a the we support

the that very we're for what So were we're the took. We here they that we're seeing we actions think seeing. with that trends appropriate comfortable and

I an comfortable. here change, anybody unless don't think So we're things economist. is

So that that Joe I it's look and would significantly If something than we'll it. mild at recession. mentioned happens, say worse

change me economy. So hard can until things will whether to what's you with tell happen tell going to the you

of have about if our this. profile that actions higher about at continue again, always had at we look benefit And taken, the levels, capacity. expect these you profitability obviously than at far talked a from to gotten good we've were you do past very are a to we've who are, in that. the So I I as that firm, that think the revenue we've we're before, when we levels with look look comfortable and they lot you made mentioned, so feel investments the we've

already, we good very we that feel be to behind being it will the on see said inflection point, without an I curve. that when capitalize able we

think we have prudent made here. So decisions been

All much. you right, understood. thank very Yes,

Kartik question Mehta with Northcoast next Research. Your comes from

Your line open. is

Dave, saving $X.X you a inflation, still you about so million absolute about you full that took, talked just just that wondering, have to saving a actions throughout on run is quarter. hit we'll on the quarter. or million $X.X of deal And with to million rate you I'm $X.X dollars anticipate that – cost is it's really not see

$X.X in we're we'll number. see Now, a Yes, quarter. million so Perfect. confident that

Great, And I at… realize. and look Talk] when we [Cross

Oh, go ahead.

No, right ahead. no, apologize. no. Go I

No, question. your ask no,

Oh, thank you.

about you know bit Kye, a elongated, I that? so, And but if maybe elongated. cycles. little talked And I'm not cycles wondering, are you being know, being you are sales little sales projects surprised our by You a

The the projects. we've in are proving process. there still of budgets We're around seen of as approval staff still are cycles There's we’ve sales being rate like years There's still marketplace. most clients having than being the years. past more proving elongated, I our of because new the seen in out at a in cautiousness again, couple recent there's because scrutiny longer – mentioned the

Yes, way. I'd say it of think this

the what's management of chain As a process approvals, even what on approvals. those steps more revenue those cautious, overall to had forward so in line the and or direct make authorization organizations going there's with and again, organization. get into approval that down finance go and trajectories to the have on everybody's their maybe up Where that's happening more looking slows now so get having it's might to command just the process. Because forth,

very thank Hey, much. Perfect. you

Sure.

Josh with from question UBS. next Your comes Chan

Your open. line is

for you could versus in managed if that Thanks the the differences sides on projects just staffing taking of Hi, good you clients versus feel trend I was I questions. differently. different like any afternoon. wondering they seeing team managed if but business. have pieces know valuing wondering comment are those lengths, you're whether my between

we projects, perspective. the need do? that at up critical, of better. mission from continuing our today, clients a what those it if done levels types little they're managed this looking Again, Okay, say managed managed to things I that managed to holding we is team do would are are project team, at committed we've yes, a need

of There's seen those canceled. been – we any haven't get

I We and have seen they months a firm But space. seeing you're have rather we'd expand project managed more seeing you're run elongate can a trim the manage so teams, other and the more little where few they you're some said, bit couple and the out date of projects certainty from them what delivery level rate. a think higher seeing overall of the than bit those in rates, trajectory the skill little a

very think without clients their can space projects? about helpful. usually competitive I is what my guess they spending defer on first Thank impacting do know that these Could follow-up mentioned spending you I your how That's guess the come you you you. talk back. and you Joe, kind of the long about how

given the everybody's aren't industry say, really Yes, dealing with I would while same outliers. dynamics, that industry there by really

a differentiates play. that organization come anybody dynamics really only had the would So into you within space, that disruptive you is that or disruptor know if

a nature. seen GC our pullbacks also funding and things We've from of those of lot

well. So as not what's landscape has that going to been on immune

move and So make any going go of to we see unless of expense they're things that bet we'll collectively, a organizations earnings think somebody elect I money And react the herd nature. quarterly breakout their whole P&L to but more that see react, to yet managing at competitors then have their happens mentality. from different and to the and spend

which whole no a and all all accelerate other going the the going to massively pandemic, at of in everybody where when to talent try market becomes than competing once, what frenzy, it's of the migrate is be So, is now what out visibility coming more create experience projects. to see stable. everybody for we'll That's same their then different

see see does It how to were what where on by coming and and on calling that when great every in sitting come. strategy, that we two a in and than was to years, this, XX but more see will during this what to today the seen will market dependent about, last extent here cycle will standpoint the day with means mobility I'm being market we're my that technology operating any – all not we recession, did going So like healthy of I've business we from of the climate. pandemic every side other it data more very years cloud the business, probably a the most so robust something even was

sense. And that time. a thanks the for Great, the of lot makes for thanks and color

Sure.

with Tobey comes Truist Your next from Securities. question Sommer

Your line is open.

afternoon. A Bibb very for This Jasper on is Tobey. good

You mentioned on call. in earlier stabilization the a clients technology

So any ask I the specific verticals are the few months. other to in or just industry have if surprised demand to trends maybe the you there upside where past wanted downside

I looking space. growth think mentioned but energy system. is their transformation modernize where both seen in now. apply and There's comments also as of productive, area them just utility on going to my critical really right the lot There's I the in to more be we've modernization a lot a of help technology

area been increases where more seen since we've in projects that's the So then.

you. Thank

so the continue to too, you [Cross and yes, regulations have And Talk] so. with its regulated, have you just

the two G&A quantify with the office sense. there next makes incremental years? the that footprint you Is remaining I any exit save three Yes, way of how know over to much or might

three Yes, we well I as got comments that the you said another here, years. probably we two think or made

couple footprint. dollars million probably – reduction on this. it's significant a a It's already You know, had we've in

benefit that there's any So but not will still occur huge We've time, a longer. done it's work. a that of amount over lot here some

FA the Thanks me, for is complete. one prepared on that. basically sounds the remarks, like just the repositioning now it based Last business in for

new synergistic about go-to-market tech core anything maybe guess there So be us share could business forward. you is a that might and with more I going surfaced? the that business with how there

You we've good I as I progress. know mentioned, think made

We’re continuing to see even bill rates go this environment. in up

I think just macroeconomic space. the is a right issue and the for in environment now bigger us accounting finance

Thanks that for No, taking questions. sense. the makes

[Operator Instructions].

with Your comes next from question Riddick Marc Sidoti.

open. is line Your

everyone. afternoon good Hey,

afternoon Marc. Good

way forward, projects talking lot that granted are you've driving I clients much going you're that delayed. did sort of far the would end greater circle to could to when sort sort client green in follow-up wanted already, to but consideration. – and – a may they as under I a slow then of again on back that. covered it's changes when of have Are are I moving up and if the I at types catalyst seen anything you get pace, the to shoots potential the of projects quick want wondering as being was seeing activity that we that be you future a after of

focus. been I it’s they're areas were Yes, the I say, to would in general, clients same mean continuing have focused,

anything So material there nature a of out there. is not

support work how do hearing things further are the looking more data which around front. those organizations cloud, of as we bit really love collective little we AI in and and that are haul, We on necessary because and leverage a are and GenAI to a in that

So probably I there's that think would material that's don't of happening nature now. technology. that's anything futuristic nature of I say the a right But, shoot. green

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that close roadmap front. to and after. come businesses. digitization and cloud say, not But the I data, of one mean, means been no going has I after by mean on customers to are any they need I remotely they've completing would things their that of modernization, are those same where their things get away

I back of microcosm the that. go to Kforce Again, is to

of modernizing get run in our years. we office We've parallel and or attention this This is with digitizing turned back dealing And what clients a office. five and front to that, about systems matter to is backlog with know, are our in a our we terms huge six operations for our building have office same and of endless. are front this. our that's You

see where or anything about about you're see thinking to skill wondering. was we areas maybe my there what as you. far geographies beginning around as, you. talent where candidate you I is you can thank you're to that I bit levels seeing or Okay, follow-up And should be more candidates is that. more little guess you're availability. it be if And Thank available to or there beginning share a for are particular then

From mentioned, areas people, a quality find I'll just area, data one. of positions hard engineers, those that demand. analytics, in you much some in the cloud perspective are talent are still Joe skilled highly take know of still that types those competitive. to very still They

what There's There's the a it's There's as a areas in move in competitive. support softening more seeing been of very a areas, but those into things. lower you still your or from those we're been plan, been majority definitely is production softening, those the QA. down which we positions. types softening Where of level the high-scale is

skill high I very of last the single been unemployment the or better and XX has any either for that we years haven't digits, seen change. part the of negative actually mean, low

of the those place, being of that much organizations the softening by more were then so talent. but much maybe this out are that are softening taking to weren't enterprise they work, able still further individuals that mid-tier is there moved for absorbed organizations being compete ahead the with seeing, just even So we're curve more little demand. that's adjusting bit, It's that a around of

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back There I time. further the this are no at will now questions turn Joe to call Liberatore. over

much you for to Kforce, clients every with in for you our partner to us to and we – to you allowing you consultants support Kforcer efforts and to and look forward Kforce. us your pretty QX. to like following of the allowing for our speaking our say thank and Well, Thank I'd thank you. interest trust your with

This concludes today's call. conference

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