Kforce (KFRC) 5 Feb 242023 Q4 Earnings call transcript

Thank you for standing by, and welcome to the Kforce Q4 2023 Earnings Conference Call. I would now like to welcome Joe Liberatore, President and CEO, to begin the call. Joe, over to you.

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

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

Investor in efforts than of have remarks Kforce more team website. I'm we challenging our well the that grateful Relations in proved executed our be XXXX, tremendously extraordinary addition, our environment portion originally the In for expected. who of an published within prepared to

allocating allowed significant solid by and focused us execution, in to also people continue towards Our tools. results driven our capital business a investments strategic model and

office, take one As market returns to areas enter a Kforce principles. investments a transform our result, XXXX and implementing we efficiency shareholders. drive operating back our our and well we while organizational long-term AI positioned significant in of further to making and institutionalizing include to continuation additional certain create are design productivity The share efforts for the

our and our application Workday Firm cloud future once for selected enterprise we the application front-end fully streamlined Microsoft which XXXX, financials, unified technology and create suite over years. next as During few and state the a HCM will implemented our for complement

We with Microsoft, companies in these be our meaningful technologies Workday of long-term the available. The transformation least be to become X foundational ideal investing are XX% contributor us will generating margins. one at AI, a forefront take and of in financial operating puts advantage meeting of fortunate at which to an incredibly to partnering objectives position of as us they

and XXXX. XXXX firm domestic we that confident in closely market well continued highly address the caution encouraged due difficult organically, that believe environment. digital years, have uncertainties, in Companies implications world-class 'XX, uncertain solutions remote technology is geopolitical resembled grown to XXXX in of environment. quarter exercised the in revenues skilled success conditions. We an technology was our the the experienced to strategic remain Great we acceleration combined improving other we to companies Recession critical by what of experienced model grow a refined cautious to XXXX Our very the companies market a with We in provide we sequentially decline decline business in and experienced and our in fourth to are for and technology during been and to transformation efforts, made investments that to positioned economic basis of business many day our a on our consistent talent a due this has in revenue over to decision in remain the the with technology billing XXXX tailored work

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it we And structural was must what our message decision-making. We in frankly, in our clients cost, simple. begin XXXX to Our that support revenues on long-term people which levels. some we continue the made XXXX There no to consultants stay while our a listening to the difficult adjustments lower control, maintaining our as are reduce to view and associates, XXXX. our uncontrollable. of July impact many mitigated control close our profitability can internal We things different is are in

base economy in views ongoing prospects of will in a many our landscape macro is uncertainty Americas the following see Our we members, in effects there loss and dozens whether the avert war their economists U.S. in the others. across the along with are of monetary grow, uncertainties in Federal with Reserve. The service election continue by tightening landscape region the challenges that the the aggressive and strategic on or position XXXX the Israel, into Jordan, U.S. landing solid, a still of geopolitical to the tremendous recession in a war and XXXX the injured recession, the soft conflicting the exist With in said, in on including drone slip Ukraine, excellent. attack are with

businesses Gen continue of indicators technology technologies. business, our are and performance my further in others, I that clear behaves drivers remains years of and technologies the in continued to trends of What with of and priorities. The secular necessary and adjustments mobility, strength bit long-term and jeopardizing make to the have cycles pandemic, with the technology, role of accelerated demand instrumental advancement the without in significantly closely each will monitor a and business will We differently. computing, Great continue strategic one digitization AI around XX-plus businesses. economic a out use the seen coming headlines the increasingly an among strategic evolve our the with to to AI our of the powering is and to us play broad in XXXX though lot including Recession, investments in of both cloud prepared

of long the demand and than that believe term, we to drive technologies AI the will accelerate. rather will and Over resources change pace other continue for, technology replace that

ideally are meet to that We positioned demand.

transform ability critical resources Our time, core businesses. identify scale, competency and is real at provide companies world-class rooted help them to complex in and to problems their the business competitively solve help

partnering the and forms, assignments needs to staffing of direct our operating across flexibility to team Our projects. us from their manage engagement with traditional clients hire, model spectrum a allows manage broad also meet in engagements

the desired XX-plus the While investments clients with to continues last acting backlog restraint grow. months, over of have been

disruptive other today's are than simply technology be domestic the want optional important the on focused solution macro competitive high market simply to these expect space. once talent and We uncertainties technology priorities Technology other we clear. would There no to be climate. to not begin are business investments in investments

have a We built foundation Kforce. at solid

$XX to XXXX, clean, generate to opportunistic expect stock million is we sheet balance cash over XXXX. Our to of which in us our be in flows in and continue repurchasing strong allowed

our and objective share authorization repurchase shareholders. support quarterly Our our ongoing our dividend to Board Directors returning approved recently in capital an of to increase in

Dave, thought operating met challenging am to proud our I environment, wanted team. call each of made how and reiterate some transitioning the a to I Before challenge. decisions every and through and difficult performance of Together, resiliency collective Kforce the we

We greater future tenured, as expectations. a Kelly, financial dedicated are Kforce's future detail of results financial our Kforce. provide one on am as team team operate even at to Jeff our model, advance the into I additional Chief to Officer, is have ability Kforce, an passionate our with now will insights firm. Dave strategy, office and more continues in and will recent blessed resulting then team's performance give operating overall our in to about consistently that combination our excited high-performing Dave? Hackman, our trends, occasional Operating Officer; Chief Financial our as well as integrated

quarter by just in above technology fourth were guidance. of X.X%, sequential came encouraged Thank our you, Revenue Joe. by We the to business. see overall growth our sequentially for led in midpoint revenues the increased

overall in XXXX, while Flex were down X%. were fiscal For business our revenues XX%, technology approximately revenues down

the business followed see As market stability consultants a XX.X% beginning QX quarter. reminder, growing the period. which in significantly Technology XXXX, was began by XXXX of on to over number assignment the our is The in X-year through outperformed and fourth the we reflective sequential that in Technology modest in of increase our a mid-QX, business growth

later at IT into resulted prior than were of year of usual of growth assignment could orders technology which the said, a over a traditional XXXX from new the generally look a beginning get Technology assignment we the levels, trends, starts redeployments slightly that than year. With QX This as as improve improvement This within consultants we consultants current on slower seen early And greater year-end our leading levels we as completed approve to budgets, level than the from of last business ends X our slightly to the were clients fewer beginning quarter. albeit as clients. an our of year-end clients in may weeks, the later suggests later usual. indicators. start in our As believe in also the at in in new in assignment we quarter of projects existing contributed acceleration the result, in that slightly typical were pattern the more we've see number

to point at levels approximately critical they initiatives address need bill while of the technology rates retain highly hour. record the provide talent a backlog we recognize in increased $XX increasing average their aggressively. Overall to that near clients more confidence await of remained Our our per skilled business technology

supply While as highly bill demand to term stable short have them we will over been rates the few expect past improves. longer increase the in remain talent skilled quarters, over as

bill engagements continuing to benefit Technology and teams average increased addition, business, an carries project within rate. our we're from managed mix of which In overall higher an

and the trends management, cloud, XX.X% UI/UX, in in front-end to business sequentially XX analytics, Our and needed recent reflects of continuation take by areas data our clients program on project advantage technology a efforts. digital, points remain work initiatives points business of of the focused margins of year-over-year. data governance, This basis seasonal and represents Technology companies basis intelligence, critical saw of decline AI-related a XX and of modernization some investments. Flex planned

and calls, the seen mentioned the prior in declines environment -- of we Technology we've seen margins recover we've that have year-over-year see slowdowns, recently as see macroeconomic typical As on prior in stabilizes. we what Flex normally margins are

requirements, due the success access project overall to forward bill cost-effective staffing their to teams essential project of our right stable, traditional than to talent be payroll clients. to their broaden our existing service as beyond we XX% as will to executed and our continue managed and in resets. We've look within Clients project to solutions. to by continued Flex teams being expect we Technology demonstrated more solution and the a solutions business though As pay spreads to lower managed tax be for services seasonal QX, consider see margins include offerings

integrated clients' our and relationships solutions strong teams that and higher-value we address sales, companies, Our utilizing recruiters existing have cost efficiently on with challenges. world-class consultants by effectively to strategy project our and provide capitalizes the

leaders client large prioritize their typically portfolio competitive is investments and diverse includes maintain market-leading to technology Market advantage. customers. Our

be their drive Our long-term above-market critical sustainable, needs performance. ability to on addressing focus our to in continues

diverse Elsewhere, may manufacturing. We provides disruption quarter-over-quarter industry technology in experienced transportation stabilization an saw long-term verticals in we or including retail in short-term services. financial consistent growth. some improvement and a platform industries, certain our outstanding and clients While larger occur our some base within in trade for services of headwinds client and QX,

technology year-over-year, expect XX% we XXXX. to decline is between and QX, XX% which QX to revenue consistent forward with Looking

the environment. supporting grew included a business relief reflects hurricane in the declined XX% to period due our we X% no FA year-over-year are also decline approximately The year longer macro challenging support efforts. business to but year-over-year efforts more sequentially, a Our repositioning as of project prior impact

of approximately reflecting this synergistic business, which of exceed $XX in our to points improved improved. be continued due rate down We hour, margins the points decreased business business year-over-year, lower expect with set revenues repositioning a higher XX% basis FA towards as mix has service XXX offering. Flex margin but per since in business a first technology has success average strategic basis half XX more bill our is to skillset XXXX project with significantly our sequentially to have client, our of our a

We run off. levels to that that expect significant bill spreads business stable longer fairly we are at of now these has remain majority no pay the pursuing

margins decrease due revenue taken and seasonal necessary balance between expectations. FA overall strike resets. We've to the However, to will measures associate and payroll sequentially productivity a thoughtful tax our

on when prior most business to capitalize retaining targeted are we economic in ensure on that our associates in the are prepared demand in downturns, investments the well done accelerates. we've focused to it we making market As productive

managed We within is solutions the project of to the Firm, our well. offerings and progressing integration those in which and capabilities continue invest teams

We recognized are of have for most in providing market the one fortunate talent the technology solutions. brands to

Financial and continue performance. team. I'll group. above-market position have doesn't resilience in the Glassdoor consultants our without XX-plus over as history, that dedication, the over operating and ability established and an Officer. clients, displayed highest we The unwavering that our to our Our the the incredible I'm to overall been tremendously about turn reputation now within and Jeff us, our to Chief the organization success our place Kforce's by creativity peer happen Hackman, we excited call has carry year continue rating and candidates trust strategic appreciate delivering I

understanding performance measures Dave. in substitute investors are provided you, of financial my these included measures of be non-GAAP financial I not further will as with a In commentary, discuss additional to They considered clarifying as the items non-GAAP GAAP. impact Thank financial our certain on or to should superior for prepared costs accordance in aid results. items. The the

XXXX XX% Our year-over-year. $X.XX release XX% was between reconciliation press share $X.XX, differences approximately year-over-year. financial the in non-GAAP GAAP GAAP provides measures. Overall per of which and in decreased earnings XXXX billion revenues of declined

This of the year-over-year, a the XX%, margins. Overall, decrease was in mix the costs and venture. Fourth as SG&A XXX a for expenses over and decrease quarter is settlement which $X.XX were of actions charge. in reduce outstanding XXXX joint combination revenue the matters, lower As adjusted the than revenue adjusted performance-based structural quarter anticipated to XX.X% percentage impairment and period, normalizing to the XX a basis outstanding was lower $X.XX to million fourth a fourth of share related settlement direct third our to of of previous in basis declined year-over-year decrease gross quarter costs a basis a venture of declined the costs. for XXX quarter, XXXX. at lower-than-expected year lower XXXX while points prior top year-over-year, from Flex associated a lower for XXX with XX.X% charge end fourth fees points health legal due due compensation, of of of in charges lower guidance as due or revenues points joint declined professional litigation. XX% was a quarter to costs $XXX.X points basis SG&A stemming care decline per after of EPS to earnings of hire impairment represents a and margins SG&A of sequentially the Overall,

discretionary also and our this control greater to generate portfolio, occasional real office from leverage our We estate continue macro exercise environment work given environment. spend in

the of exceeded our of expectations X.X%. margin operating of Our end and X% high

$XX was the in XX.X%, which the we higher to was adjustments generated fourth cash our and certain fourth due flows than repurchases. tax XXX excess operating in for flows in We market and nearly EBITDA capital, in million quarter invested of cash our million dividends return credits. of we've was were effective $XXX flows, capital returned to $XX.X in rate Operating approximately quarter. million points million, tax XXXX, open XXXX. shareholders in via XXX% basis Our $XX anticipated, XX% were Operating on and to cash

driving growth balance and business debt. by minimal We over our consistently managed has solid have a that results in pristine years, prudently sheet organic resulted with strong many

financial our business. Directors confidence the actions our repurchase million. of and approved continued increase in dividend, again Joe demonstrate opening As his and increase remarks, annual consecutive our indicated authorization share an in Board These an fifth to increase, $XXX our our strength to in

in has Our pattern of returning years, many operating been significant capital to this consistent environment. over our just not shareholders

of to since cash for our to regardless business prospective growing high. shares of In at million climate XXXX, fact, than have $XXX capital more returned initiated acquisition in, in we represented million our dividend have reduced slightly improving since has million. All and our capital we have to weighted returning XXXX, we XX% shareholders increased remains since XX.X levels. We from the average significantly threshold which nearly whilst approximately our in XXX%. remain committed XX.X XXXX, profitability the and our outstanding economic generated, any we And

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

The which XXXX. quarter first first same quarter XX X the has is than XXXX, and of as billing of more fourth the quarter days, the

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

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

while help ongoing deliver office, our drive remain strategic longer-term We and estate. our are make advancements fixed such the technologies, long-term double-digit transformation our improvements. Joe solutions may strategy of teams excited and and to financial of objective what our necessary mentioned of back-office our mix back through operating and believe above-market beyond for profitability costs including, investments position to scale, the margins. key expect contributors growth in short-term about Looking real further that reducing improvements, integrated the obtaining in and uncertainties, increased macroeconomic we a be and prospects greater driving as we will productivity continuing growth program managed continuing extremely business AI transformation

X% operating in reference, was our in of point XXXX, $X.X a billion margin As revenue. approximately at

anticipated our efforts. On I'd we profitability XXX transformation about offer a would scale, and combine investments over sincere look with of forward, double-digit current back-office to reasonable a with these confidence is further associated level than you our the We program has call compared due efforts. margins teams team, thank slightly front in we more this revenue increased the point level this technology benefit for you for we billion transformation progress office their We data to turn our As with in annual the benefits to to points of our seen investment. are of revenues. basis behalf benefit believe our us to attain to When achieving our operating as in entire extend the levels, our the questions. returns now like like have management for $X

question with line [Operator Marcon Baird. first Our Mark comes the from of Instructions]

I'm it that wondering start. the the a little quarter. the regards you the last did a to bit like I with couple trends, take slower note have in fourth And up. looks improved in they've if actually a year-over-year picked But of was Flex, Tech at weeks, look of there things

-- you're starting a your wondering, to with assignments regards bit rebound area a can level of and any little see or I'm you is the particular talk to up? vertical what So about picking there confidence where

is this Mark, Dave Yes, Kelly.

a happening. just kind of the obviously, a I'd put obviously, that some clarity think on I start but And mean, made. I little of comments of there's So bit lot uncertainty, saying, by a I always

at approvals. amount delay year. greater be of There ends some to some end bit It budgetary So was had little that seen the seem in you're of right. the a we

the interviews, bit led weeks, a to our late really, X a orders, that in last our really greater lot levels. key QX our But send-outs And returned performance indicators, to follow-up. we've of maybe seen job so

and it QX, activity. we we saw as a as our made sequential for growth of point a Technology business If remember, obviously, increased a in to you QX the remarks, in result

backlog that think about we last hear we our investments what seen are the levels So weeks anecdotally that indicators. technology the and we've continue the to clients from in of positive couple of

based, it and driving as new industry-specific. are way, might about industry the asked I we but in there's I there and pretty So is we broadly clients you that wouldn't -- it, always particular not we say, industry, projects that say, win think certain a by it's activities, that's as or

So if overall, I here say characterize that we the were today, pretty we we for potential as to positive I QX, stable I'd improvement. think similar characterize saw in early it, some signs sit with environment that really,

good about sit. pretty feel I So where we

And rates. the then little can a about talk you Great. bit bill just

was coincided specific for QX Flex stabilize as declining to how with the in down and And should year-over-year, sequentially margin well? you sequentially we So can Flex gross Tech little bit that margins? any about side, year? year-over-year. I'm and that particular we -- gross Tech for the on the Do both little was client? think coming the broad-based bit profile that were is wondering, that those Or one they a confident and feel margin a that

the X.X%. little space, obviously bill rates Technology, be decline, again. rate right? Dave the technology is we pressure than point. less you think I'll to the as this put finer Mark, all putting know I So XXXX bit clients in precise, X.X%, year was well. mentioned obviously, in But Yes. so on tough declined bill a Maybe And a

it essentially So stable talk when is relatively $XX, stable. at about we

It be X.X%, So could really no change be but to a item, anyway. specific is driver that a mix a it nominal there is right? project, it could

think think about So as it rates. in bill year-over-year a I difference we don't

we've going don't the In that we terms have in forward, seen spread other quarters. couple seen expectations expect of that resets the any said last We we margin in changes payroll we really of that tax and got QX. we've mentioned had than

be clears term, see look revenue in would expansion Flex of up margins see So to these term. Technology, at some to inflection stable longer the obviously, we margins. we the in near in would we when in and in the -- flexible some say, in levels trends, maybe uncertainty this also Technology positive I typically

I pretty this we've looks pretty much this historically. mean, historical, seen So is like

traditional as we we from a a pattern like of So perspective, just have here. we're margin feel from revenue kind following a perspective, pretty

think in Mark, in we XXXX, to stability but Dave expect more of went, near first we our seasonal where And our and term, clear margin Jeff. year. Technology do as this, up after in profile QX has that really the QX business. margin I economic today, of here the on with the tick impacts our of expect skies and business lost in you right, half I bit. earlier to we've The we think to we've quarter see certainly, seen to is some And touched a comment that mentioned good the sit the the that in recapture one declines in stability this that QX. traditionally Dave's Add would fourth some But the I seen saw Dave QX. in good down Technology Flex in on we earlier

really That's SG&A a nice showing then discretionary more the efficiency. great. managing you And job in of terms and did

year putting place. through? anything relatively there internal -- QX is that in got think we from you've or your big anticipating Workday are Are perspective? the guidance you internal that terms we of should you're that SG&A, about unfolding implementation for clear. be jumps for mentioned as The that due the project also in just You should initiatives of your aware any goes starts that How to

No.

comments of can we're selection we selection a been for historically. to of remarks, of is to prepared map continuing road transformation think, second meant kind made back-office this it in for we've convey I thank I of and Joe And about half X.X in some probably that's call the after our SG&A pace that you Mark, relates and Workday. we're the We've it, year. the comments the into to XXXX, X, Mark, have the Workday going been the that controlling 'XX heading we in program, XXXX, we into I your said confidence at 'XX. as the on in program Mark, been in control, under. mentioned increased think control think our mean, years, last I the invest what going on our earnings

So I expect our from I related think to an standpoint, program. significant SG&A anything wouldn't in Gemini 'XX

So I it, think the short from that's of standpoint. think, I Mark, that

Great. me. as talk encouraged And in company for then broad margin last we margins. mentioned to SG&A a hear we going gross strokes, operating you you when finer double-digit as for XXX that and to a get I'm with SG&A, just about double-digit How more wondering one thinking but point to could if revenue. $X to we're billion, about, to regards think percentage billion about of mark. you the getting bps, you the and the $X efficiency are the put I'm get the assuming just

Yes.

linear. were Mark, about of we was to components the from what double-digit benefits. the in step number revenue getting function. I bit benefits expect I more be the prepared those certainly, as But this grow at expect of X% where versus there's a we covered to would Certainly, I Mark, XXXX, remarks. would continue think end know you to the degree we've you think, I talked would margin. of scale of is a the about which to a linear operating

front what Mark, standpoint. as be to a investment years, in for from our a years a that progression that linear for financial invest contributing our kind remarks We is current would of left in factor fair linear those that back some office been back-office into also of to that rate linear. I of significant as basis we out. versus progression it's number got and did savings benefits. anticipate expect a assume technology quite we've to of largely XXX to pure is run in us our that that improvements, office several objective transformation prepared math compared, mention after step my to the I drive the program. some think Certainly program. you call to We've I to about being points, both

driving component, of a years. feel like been say, hopefully, real been constantly a fixed bit. structural that our years, of And got 'XX number which pretty 'XX, We've helps I left Mark. there. The But we've number we So do a things bit costs is for would of in confident a cetera. last there, estate, we've et getting after for to and that work after and

Yes.

Just maybe to add, just Mark, right.

this is on a a, we've in right, on time, right? We able last had years of been improving business So a significant of the view number being a our to margins. path confidence that that productivity. simplifying focused the with a have is relatively We've focus improvements increasing there, get long built an this for speaking, very over done operating model in

on execute and put in ago that executing So to continue on. expect we've this is plan to place really just the the been we years continuation of

of as And to variety way would operating dotcom, dot we shift. strategic as Yes, capable of a strategic can that that proven the then past decisions back made divest We've the we of that when even, the room, And move this to firm is all percentage with tenured happened. Mark, I been doing margin the we a focus we when dotcom, back the for and those -- because of those our and focus the tech units person going compete this revenue with IT dollars shedding to of that XX-year were is go Joe. journey. in say to mean made I most to hire you com. never and down coming taking within our in decisions which around going out direct get reasons, of on the it able replacing to investment be weren't revenue. dollars, for healthy that has

be today, we'll plan are So get to margins. confident long, Jeff get to and highly range, into $X that double-digit operating what that long billion spoke us about, able we we those we as achieve are strategic where

next comes with Trevor Our Blair. question William Romeo from

to First about question about talked kind seeing the a year. one, their size this budgets of Yes, relative the I know you last of I slower year. improve IT But to had clients being budgets you're

slightly I about quickly later you in think you kind and that do versus spending? XXXX. potentially How this to see your happen And confidence quarter, still maybe year? potentially then macro increase Is flat talked if of increase an clients project we last those adjust can do expectation? up to think

specific nothing's Yes, time. client to to industry might the general, being to both I of in Again, favor say, projects terms on budgets, prior they changed I are diversity I quarter, believe I allocated in more I focused and at needless mean, But than overall internally as of we emphasis I XXXX. say and this mean, differently last are on There's budgets increasing they're stretching point think are it. are the that the slightly flat focus would quality which our hearing gain out as with discussed, get little we mean, mentioned there over a in efficiencies, externally. years. really seeing a have dollar really bit portfolio. I to drivers, play our also in and mean we to being of even

servicing work really hybrid type type do is more good and longer with for more news the firms us that's opportunities, which such multiple there. work, provides staffing just to no us consulting efficient as after go opening at opening very high in looking exclusively their as up through cost solutions a think firms an are and for us this it to I clients traditional means

top And I is desire everybody's the are the in if after I would incredible. data they're competitive move very standpoint. much with clients to their Gen on they're factors So quickly opportunities. and early staying they that get work disruptive a could because standpoint, very say, because there. throw are their down is terms majority and from with, that getting I out that then get what they're interest seeing need done position to AI an the their of -- of the there, in that we are non-technology-specific nothing's clients backlog rationalizing start industry rates see organizing their to data mean done I think innings. we that not do of do with and positive mean just reaction, see able to I from really we we believe, step changed

while certain I SG&A at different making more to wish we there, So than investments here Kforce. dollars sure they're had things. I'm accelerate no

So there's microcosm think a greater our just loosen see visibility, more to with I get experiencing But as things of -- there. we're -- I predictable, up. what clients. think become that's things balance start And we'll a we're

just guess, happens? indicators be you Okay. happen, lately, helpful. And guidance of a to little guess I to more That's that the guidance that, as kind leading I would bit could then that the the of Great. the improve some assignment does assume starts upside throughout project on quarter or following QX improvement you've up it in seen described the

Yes.

I these obviously think, Trevor, there's a lag start more robust. become indicators as to

is mild. the for that the the the quarter quarter But improve. as look might trajectory in So the second first see year and will beyond pretty improvement into we we

in the to So as revenue see we a seen sit fifth only we've So left here, have few on in weeks, of the few you February, improvement quarter. and quarter takes a the weeks improvements right? it

the in as we're first really move the expecting So great not quarter. forward. lift It's a we momentum

Our Kartik with next question Mehta Research. of the from Northcoast comes line

indicators. some And that these have a guess, from just sales I getting are sales. to How final understand, or ultimately is Has seen? about I change been talked leading you you there wanted resulting cycle, inquiries in progressing the to what in can Joe, changes conversion?

those sales to started really back change uncertainty been anything seen say half terms indicators, of The when cycle. the really Yes, we in no, with elongated for haven't the creep of has in. I cycle -- since sales would XXXX,

there. for, changes to again, comparison quarters, think I the clients I about more we conversions X significantly were. And had we've where in as would looking rather over seen the asked you our of we've the that's X or what come are down material bit a no last conversions, course So flexibility. say, actually, little

tough they're periods cycle time FTEs, seen multiple where which, again, of So to the calls, consultants I've it's in discussed is back the I've and normal on on into first years longer consultants. they recessionary for holding versus this exit goes XX prior to periods thing converting what do the them that the

resources. when rightsize on. FTEs. start And fourth phase bringing then to is The they third And on they is to back start thing, they really bring thing then internal second do start consultants their the they the back

seeing, is traditional all that that's think I So out. cycle playing we're

dollars, your to stretch changes of in And X lot wanting than competition their seen then from resulting more or the wondering, you maybe talked this to XX about in months? which companies competition is you've any obviously past a makes I'm sense.

say actually would I the viable traditional still competitors Yes. all -- competitors. from competitive with a standpoint, we deal are

do didn't those customer maybe good not that see and go One typically organizations these receivable well sheets, balance see as go prepared, bad. is of had were they concentration through the have a high we happens that things a you cycles

different new we're that the whether historically side, really and we've larger that marketplace. many of anything in they're on think exiting typically more times. But tougher they're the landscape. this mid-tier day don't staffing in. nothing's or we we those really out, we the in anything, that the day changed overall professional competitors I If competitive seen but the players are coming landscape in of see solution smaller as So And it's cycle with shrinking, see or providers, terms see don't than seeing materially

manage would I touched is of staff last an sentence, and thing players, [indiscernible] the could in to from on it that So offer traditional services really differentiator. suite teams The Joe the the important larger add, they right?

in be and that to And they're spectrum. do that's of the those companies spectrum are why relationships is to that the have do we in for who So do frankly, landscape can significant services. part long-standing of the deliver what lot the competitive got we've across winners a can of across reason trust our ability clients looking because what, going can we with the

larger table entities, because can seeing players on the Yes. to organization to smaller bring it's the because to And making credentials to, afford they they the of an we're expensive are can't them those proposition. the those why afford front to bring that's resources in investments get the

the say expense lower would which that dynamic model marketplace another a much type you're to evolving if of, is traditional strategic step a I in is versus in So with. just that's get involved

from line the comes question next Chan with of Josh UBS. Our

year. ramp-up the slower mentioned You this

where that to do a year past start usually on catch-up expect slower I was years Or you have suggest ramp get been of So slower kind do back see slower you pace? in the up a kind to overall? wondering, the of or years

year so seen Companies that is a Yes. took this I I different, uncertain characterize at bit a is it So mean, every little longer, about right? way this right? So Josh, is think we've we I year looking the are IT year. thoughtful and that very budgets in phenomenon think being is, XXXX. their they obviously, XXXX an

now said, You heard seen this us to sorted bit say going I And through got I've -- as [indiscernible], things as them do. okay, past. What that, taken haven't we I'm know in little these we've longer. years they've finally it's is they've what a

Now I that need do to to to the I work people go need do. the find

course weeks, year. seen So of we've in would earlier seen literally or a given the of couple over last what we the have a week probably X

of So getting it's it's seen probably just a started. different what from least a a more lag our more not bit in than, we've so perspective, It's -- at things model. from far,

holding from to is the the of the XXXX, hearing would within of compare hearing prepared out the we things going Whereas more I difference add are year, back, similar. here lot if have clients XXXX concern of to in a of there those beginning on cut of to in the lot types even with material organizations, back, XXXX what internal to the things. of necessarily And we're XXXX, beginning years not at the we customers. Yes. most optimism There very our about probably started that, were was beginning were about getting albeit a

this of delay a just think pause. is So I and more

The at everybody kind It matter is of I be Fed in And XXXX. those time. and point equation looking it's to where all the in think economy, dynamics. is of perception the really clear what's a going overall through with windshield this and So of cuts just windshield. of cloudy happening that the was looks pretty rate

overall, So see. were lot of the XXXX. experiencing more a in I still wait optimism than I'd what in everybody beginning a little of we and But bit is say think

of for Thanks at guess Joe. look the like drivers from the could current levels, to that today, and the looking It the meaning goalpost flattish take Okay. to gross related, you're get Am goal, read? get to of characterization, put margin the current that are to if you've I long-term XX%? helpful Is margins kind the really then down at be SG&A up profile. right most that That's it sounds XX% that I to color. thanks for that right, reading the we SG&A

Yes.

this is you. Jeff. Josh, to speak think, I Good with

that that a pace. of number benefit gross and gross at call office the year-over-year, that of were us that, Dave's us Yes, certainly, into comments Josh, I of back the at leveraging think scale, look think the for the When SG&A. The been we've be program, yes, is most basis predictability leisured But which about gives years margins benefit when about better points. Joe you when about now. you infrastructure of the part, XXX you down, to it, think scale. earlier, driving gives margin components transformation existing going tie its of for our

to certainty you've Obviously, degree, positive. some would clear recapture a to in U.S. economic certainly expect more that in the of the got a start we little skies bit gross GDP, where margin. As to times

mix would at X.X%, historically, hire depressed right a it's little direct now, Our bit been improve. but we've roughly Obviously, about X.X%.

the become gross So we margin for we've a the some would primary economy more Josh, lost, to our us. clear I to starts for clients, your is recapture but point, as to that SG&A think expect driver of

the hire. have typically project been on opportunities, add, to about that's Obviously, margins space, we stable Yes. as gross continue planning And it. I mechanism, plan mentioned, we've we're the solutions thinking executing carries Jeff a a would and success how managed as teams in margin. so right, that direct is higher

it. not part opportunity So there, is of but that there's

that counting we're -- at look about when the of Our part opportunity. That's improve talking a is profitability as not -- the path on. we today, we're what that -- to potential

& Company. comes Our Riddick the with Marc line next of question from Sidoti

Maybe year. you the the authorization. and boost maybe a So of little for questions dividend repurchase the a my on touch touch and could lot already bit of little was answered. if CapEx a usage, wondering have your cash on I that just share the bit been announcement thoughts the share you on

good some worth I but this you. put Yes, we in prepared know remarks, the to Marc, I reiterating. chat with think it's of

on been side, naturally growth it be to is ability repurchasing of shareholder answer I in the believe generate we've have more difficult been repurchasing as in before at that us shares believe a you Actually was should face to organic short the our significant a shares doing, macro revenue We go. for similar expect to long very to think in what long-term the environment. time. where capital we vogue for in I XXXX, appreciation.

that can a avoid acquisitions business. capital-centric disruptions from tend to in come the human You

our authorization gave this had in quote through XX million continues more million I'll we've think of time. at you, our $XXX the which fifth did When earlier also while, capital returned you take and as sit we've remind in XX.X XXXX, increase shares We Marc. raising time, for share that Directors last significant. this we million, all I a in having quite dividend to by to which and also, here program same that share deployment since Board yet the So QX again, on that's And slightly we our than repurchases, capital dividend and about year our XXXX, of our shares consecutive support $XXX today. million was repurchase X.X%,

range. the you look and the probably we Marc, long $XX high term in teens-to-low we're at of and if back, you over bought what look that, So

been So I a very think significant from shareholder returns. us friendly it's been has for perspective, generating and

on Excellent. for as as the thoughts any range And CapEx then maybe year? far ballpark

Yes.

got that $X about of has office is been total lift transformation to sit area talked time. to I would footprint I rationalizing it's degree, CapEx CapEx back thing part at. is $X so think XXXX. here here less our improvements been historically estate as We've million somewhere we about what moving we've but the been program, a that, another our between of other our which tend in real for Leasehold over we into running CapEx, CapEx, imagine could and obviously Marc, million that we've

So netting into as a it's got move effect 'XX. we I think

'XX. So I'd flat relatively as look with at it

from question next the Securities. Truist line Our Instructions] comes Sommer with [Operator of Tobey

sales of people manager give I And recruiter of was us here years. you're couple some if slow a you count what color sort your about could wondering account managing how after head your like count in what an you or would looks either have of occur? kind a demand increase we sequentially for capacity sense get can with and head so absorb to that should deal year-over-year,

is Tobey, Dave. this Yes.

by off those more to -- So to enough things capacity I needs needs. I'll saying we've meet than would current got start accelerate and as meet

intention our and you, more part as capabilities know, And that over made them to is capacity. activity is delivery As improve generate with continuing to to investment forward. make continuing and obviously, of are continue to to as and look we a as and allow our add the capabilities I think, that the of cycle years lot investments we've of the the that sales our well

there's earlier, the a terms an process, Joe of bit in cycle. as had obviously, thought mentioned there's in our sales So elongation, activity more been of

And added technology have seen, year-over-year, at on decline we stable, focused we've in become our our and sales look can slight always entire relatively sure allocation number of to relative While recruiters, think, increasingly where the because been in obviously, of making investments the we that recruiting recruiters net-net, we've salespeople the a is. to force, lot have, productive the right candidates. I sourcing

as just periods. the slower not So maintain profitability sure making we're ensuring always in about not we're We're we looking right? that levels at that. well, on We're focused maximum term always thinking short

always a forward. good We we the as place move playing and like in to long very we're and continue feel do term for are so

is we're Yes. time you well the up side, Dave's to on sales why side people which to know, relationships we've the actually for other playing because netted take Tobey, build. as point,

build. So that take know, relationships process as you other because, the in for we're build to playing side well time

exploring the and side we're in other also side the delivery we've playing because the So other David technologies, with that all of for what on side, recruitment we're mentioned, the technologies. made build investments process

we model good very ramp a quickly. up that have pretty recruiters can We

great have right now. we So capacity

requirements appropriate they sure can can levels our people to and to feed of make have that income. can that those things the them, also balance We we survive that we have make enough

the handle of So ramping can job side, as we the and side prepare spike see for in those up. side. up start to we up the then it's point quickly sales ramp on other start typically the types how balance to we to orders things, this start cycle, recruitment And

We have a great internal recruitment function.

locked leaders we loaded. quickly. and turn down know that Our can are We very

I if for which you more than your industry could, maybe sort from to little include customers, relatively there, vertical I verticals. volatile tends services, an bit industry give a relatively kind of if weak be color financial ones of some strong in was know and you wondering could other which or some are standpoint

We gauge, a guess, the a things financial alternatively energy, I quarter. start client that, industry, I couple by level. fourth manufacturing saying vertical a obviously, particular from good In of lot specific little to was made as the to there. in any a a because had us nice Retail out industry strength commentary, having we weaker actually have for also was quarter-to-quarter success had projects sequentially services well, in of a our would that sequential it's barometer I for said services, to technology success right? drivers we do as us. Yes. tough are Tobey, in But at

it there industries or and that to are worse. So that it's different -- are each think if seems quarter I quarter-to-quarter, mean, back I I better look me go

end. of comment with start it my where the guess I is So caution

quarter of call managed and worse in between then exiting staffing Okay. the areas? Any in me. and discernible out one kind the And the here services, better of first as business or the for those of of last anything the part demand quarter, one difference fourth early you'd cadence in

Yes.

the Just obviously, speaking, the uptick of in services relatively managed we've last couple seen weeks to success cycle period this to our I in just have, in continued more in When our nice contributors business. to business, look at generally. a the reiterate, we've obviously,

that we're for a, say So increasingly mean I know a making of integrated looking that as is and clients general we've spot, bright is they're don't sure an trend relatively that calendar I that talked across a needs that that fashion, the speaking, meet thing, spectrum, we would about us seeing, I to in though. that. our can the

-- that So obviously we talked. much has and since changed, last

Joe would I closing call now to turn for Liberatore remarks. like to over the

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

concludes This today's call.

You may now disconnect.