What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-07 · 275 added, 434 removed, 430 unchanged (62% of the section changed)

4 unchanged sentences

(In millions of dollars except per share data)

13 Weeks Ended 39 Weeks Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

13 Weeks Ended

2025 March 31,

Revenue from services $ 1,164.9 $ 1,045.1

2 unchanged sentences

Selling, general and administrative expenses 225.7 190.5

Asset impairment charge — — 5.5 2.4

Gain on sale of EMEA staffing operations — ( 11.6 )

Loss (gain) on sale of assets 0.1 — ( 5.4 ) —

Earnings from operations 10.8 26.8

1 unchanged sentence

Other income (expense), net ( 3.2 ) 1.8

Earnings (loss) before taxes ( 1.8 ) 1.7 33.7 20.0

Income tax expense (benefit) ( 2.6 ) ( 4.9 ) 2.5 ( 5.0 )

Earnings before taxes 7.6 29.8

Income tax expense 1.8 4.0

Net earnings $ 5.8 $ 25.8

9 unchanged sentences

(In millions of dollars)

13 Weeks Ended 39 Weeks Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

13 Weeks Ended

2025 March 31,

Net earnings $ 5.8 $ 25.8

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments, net of tax benefit of $0.1, $0.0, $0.1 and $0.1, respectively 1.2 ( 4.3 ) ( 1.3 ) 0.8

Foreign currency translation adjustments, net of tax benefit $0.0 and $0.0, respectively 1.3 ( 0.5 )

Reclassification adjustments included in net earnings — ( 0.6 )

10 unchanged sentences

(In millions)

September 29,

2025 December 29, 2024

3 unchanged sentences

Prepaid expenses and other current assets 71.9 71.0

Assets held for sale — 291.3

Total current assets 1,351.0 1,365.5

17 unchanged sentences

(In millions)

September 29,

2025 December 29, 2024

1 unchanged sentence

Current Liabilities

Short-term borrowings $ 0.2 $ —

Accounts payable and accrued liabilities $ 597.0 $ 613.8

3 unchanged sentences

Income and other taxes 17.0 17.5

Liabilities held for sale — 169.9

Total current liabilities 822.9 826.5

26 unchanged sentences

(In millions of dollars)

13 Weeks Ended 39 Weeks Ended

September 29,

2024 October 1,

2023 September 29,

2024 October 1,

13 Weeks Ended

2025 March 31,

Capital Stock

11 unchanged sentences

Net issuance of stock awards and other 5.3 4.2

Purchase of treasury stock — ( 7.4 ) — ( 42.2 )

Balance at end of period ( 55.5 ) ( 52.5 )

23 unchanged sentences

13 Weeks Ended

September 29,

2024 October 1,

2025 March 31,

Cash flows from operating activities:

1 unchanged sentence

Adjustments to reconcile net earnings to net cash from operating activities:

Asset impairment charge 5.5 2.4

Gain on sale of EMEA staffing operations ( 1.6 ) —

Gain on sale of assets ( 5.4 ) —

Depreciation and amortization 11.0 8.0

2 unchanged sentences

Stock-based compensation 3.7 2.8

Gain on sale of equity securities — ( 2.0 )

Gain on sale of EMEA staffing operations — ( 11.6 )

Gain on forward contract — ( 1.2 )

1 unchanged sentence

Changes in operating assets and liabilities, net of acquisition ( 1.9 ) ( 51.8 )

Net cash from operating activities 11.9 33.4

Net cash from (used in) operating activities 23.9 ( 25.5 )

Cash flows from investing activities:

Capital expenditures ( 2.5 ) ( 3.7 )

Proceeds from sale of PersolKelly investment 6.4 —

Proceeds from sale of EMEA staffing operations, net of cash disposed — 77.1

Proceeds from sale of assets 4.3 —

Acquisition of company, net of cash received ( 427.4 ) —

Payment for settlement of forward contract ( 2.4 )

Proceeds from company-owned life insurance 1.7 —

Proceeds from equity securities — 2.0

Other investing activities ( 0.7 ) 1.1

Net cash used in investing activities ( 355.5 ) ( 10.8 )

Net cash from investing activities 3.2 72.1

Cash flows from financing activities:

Net change in short-term borrowings 0.6 ( 0.7 )

Proceeds from long-term debt 412.3 —

Payments on long-term debt ( 447.1 ) —

Financing lease payments — ( 1.0 )

Dividend payments ( 2.8 ) ( 2.7 )

Payments of tax withholding for stock awards ( 1.8 ) ( 1.9 )

Buyback of common shares — ( 42.2 )

Contingent consideration payments — ( 2.5 )

Other financing activities ( 0.1 ) ( 0.1 )

Net cash from (used in) financing activities 217.3 ( 56.6 )

Net cash used in financing activities ( 39.5 ) ( 4.7 )

Effect of exchange rates on cash, cash equivalents and restricted cash 1.3 ( 0.6 )

7 unchanged sentences

(In millions of dollars)

(1) The following table provides a reconciliation of cash, cash equivalents and restricted cash to the amounts reported in our consolidated balance sheets:

(1) The following table provides a reconciliation of cash, cash equivalents and restricted cash to the amounts reported in the Company's consolidated balance sheets:

13 Weeks Ended

September 29,

2024 October 1,

2025 March 31,

Reconciliation of cash, cash equivalents and restricted cash:

16 unchanged sentences

There were no changes in accounting policies as disclosed in the Form 10-K.

The Company’s third fiscal quarter ended on September 29, 2024 and October 1, 2023, each of which contained 13 weeks.

The corresponding September year-to-date periods for 2024 and 2023 each contained 39 weeks.

The Company’s first fiscal quarter ended on March 30, 2025 and March 31, 2024, each of which contained 13 weeks.

Certain reclassifications have been made to the prior year's consolidated financial statements to conform to the current year's presentation.

Specifically, as discussed in the Segment Disclosures footnote, the Company has made a change to its reportable segments during the first quarter of 2024.

We have also reclassified the presentation of our retirement plan assets, which represents our investment in life insurance contracts, and intangibles, net from the other assets line item to separate line items within our consolidated balance sheet.

Specifically, as discussed in the Revenue and Segment Disclosures footnotes, the Company has made a change to its reportable segments during the first quarter of 2025.

KELLY SERVICES, INC.

2 unchanged sentences

Revenue Disaggregated by Service Type

In 2024, Kelly has four operating segments:

Professional & Industrial (“P&I”), Science, Engineering & Technology (“SET”), Education, and Outsourcing & Consulting Group ("Outsourcing & Consulting," "OCG").

Prior to 2024, the Company also had an International operating segment (see Segment Disclosures footnote).

Following the sale of the Company's EMEA staffing operations in January 2024 (see Acquisition and Disposition footnote), the Mexico operations, which were previously in our International segment, are now included in our P&I segment.

The 2023 P&I segment information has been recast to conform to the new structure.

Other than OCG, each segment delivers talent through staffing services, permanent placement or outcome-based services.

Our OCG and SET segments, following the acquisition of Motion Recruitment Partners, LLC, which is included in the SET segment (see Acquisition and Disposition footnote), deliver talent solutions including managed service provider ("MSP"), payroll process outsourcing ("PPO"), recruitment process outsourcing ("RPO"), and talent advisory services.

The following table presents our segment revenues disaggregated by service type (in millions of dollars):

Third Quarter September Year to Date

2024 2023 2024 2023

Professional & Industrial

As of the first quarter 2025, Kelly has three operating segments:

Enterprise Talent Management (“ETM”), Science, Engineering & Technology (“SET”), and Education.

The ETM segment combines two former reportable segments, Professional & Industrial (“P&I”) and Outsourcing & Consulting Group (“OCG”), along with the transfer of certain customers from the SET segment to better align delivery models and improve go-to market strategies (see Segment Disclosures footnote).

In the first quarter of 2025, the Company also integrated the Sevenstep business—which had previously been included in the SET segment—into the ETM segment as part of the broader Motion Recruitment Partners integration strategy.

The Company's segments deliver talent through staffing services, permanent placement or outcome-based services.

The Company's ETM segment also delivers talent solutions including managed service provider (“MSP”), payroll process outsourcing (“PPO”), and recruitment process outsourcing (“RPO”).

The 2024 ETM and SET segment information has been recast to conform to the new structure.

The following table presents the Company's segment revenues disaggregated by service type (in millions of dollars):

First Quarter

Enterprise Talent Management

Staffing services $ 280.7 $ 285.9

1 unchanged sentence

Outcome-based services 133.2 130.8

Total Professional & Industrial 370.4 378.0 1,086.5 1,171.4

Talent solutions 117.8 104.7

Total Enterprise Talent Management 534.0 524.1

Science, Engineering & Technology

2 unchanged sentences

Outcome-based services 109.4 87.4

Talent solutions 11.7 — 15.7 —

Total Science, Engineering & Technology 322.4 231.6

2 unchanged sentences

Total Education 309.0 289.9

Outsourcing & Consulting

Talent solutions 121.0 114.1 346.0 342.4

Total Outsourcing & Consulting 121.0 114.1 346.0 342.4

International

Staffing services — 197.6 — 588.3

Permanent placement — 5.4 — 16.4

Total International — 203.0 — 604.7

Total Intersegment ( 0.5 ) ( 0.5 )

4 unchanged sentences

Revenue Disaggregated by Geography

Our operations are subject to different economic and regulatory environments depending on geographic location.

Our P&I and Education segments operate in the Americas region, our SET segment operates in the Americas and Europe regions, and OCG operates in the Americas, Europe and Asia-Pacific regions.

In 2023, our International segment included our staffing operations in Europe, as well as operations in Mexico, which is part of the Americas region.

The below table presents our revenues disaggregated by geography (in millions of dollars):

Third Quarter September Year to Date

2024 2023 2024 2023

The Company's operations are subject to different economic and regulatory environments depending on geographic location.

The Company's Education segment operates in the Americas region, the SET segment operates in the Americas and Europe regions, and the ETM segment operates in the Americas, Europe and Asia-Pacific regions.

The table below presents the Company's revenues disaggregated by geography (in millions of dollars):

First Quarter

United States $ 1,056.6 $ 933.6

Canada 49.3 50.9 141.1 142.2

Puerto Rico 26.6 26.5 79.7 81.1

Mexico 12.7 18.4 47.0 55.1

Total Americas Region 1,012.2 891.3 3,069.2 2,925.5

Switzerland 0.8 57.0 2.9 165.9

France 0.1 47.0 0.1 145.0

Portugal — 48.6 — 142.3

Italy — 16.1 — 49.5

Other 83.3 89.2

Total Americas Region 1,139.9 1,022.8

Total Europe Region 9.6 10.8

2 unchanged sentences

$ 1,164.9 $ 1,045.1

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The below table presents revenues from our SET and OCG segments as well as our former International segment, which previously included our Mexico operations, disaggregated by geographic region, (in millions of dollars):

Third Quarter September Year to Date

2024 2023 2024 2023

Science, Engineering & Technology

Americas $ 402.8 $ 292.0 $ 1,018.4 $ 891.4

Europe 2.4 3.7 8.3 12.1

Total Science, Engineering & Technology $ 405.2 $ 295.7 $ 1,026.7 $ 903.5

Outsourcing & Consulting

The table below presents revenues from the ETM and SET segments disaggregated by geographic region (in millions of dollars):

First Quarter

Enterprise Talent Management

Americas $ 510.9 $ 504.9

1 unchanged sentence

Asia-Pacific 15.4 11.5

Total Outsourcing & Consulting $ 121.0 $ 114.1 $ 346.0 $ 342.4

International

Total Enterprise Talent Management $ 534.0 $ 524.1

Science, Engineering & Technology

Americas $ 320.5 $ 228.5

Europe 1.9 3.1

Total International $ — $ 203.0 $ — $ 604.7

Total Science, Engineering & Technology $ 322.4 $ 231.6

Deferred Costs

Deferred fulfillment costs, which are included in prepaid expenses and other current assets in the consolidated balance sheet, were $ 2.1 million as of third quarter-end 2024 and $ 3.4 million as of year-end 2023.

Amortization expense for the deferred costs in the third quarter and September year-to-date 2024 was $ 1.3 million and $ 5.4 million, respectively.

Amortization expense for the deferred costs in the third quarter and September year-to-date 2023 was $ 1.7 million and $ 5.5 million, respectively.

Deferred fulfillment costs, which are included in prepaid expenses and other current assets in the consolidated balance sheet, were $ 0.7 million as of first quarter-end 2025 and $ 1.8 million as of year-end 2024.

Amortization expense for these deferred costs in the first quarter of 2025 was $ 1.2 million and in the first quarter of 2024 was $ 2.4 million.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Credit Losses

The rollforward of our allowance for credit losses related to trade accounts receivable, which is recorded in trade accounts receivable, less allowance in the consolidated balance sheet, is as follows (in millions of dollars):

September Year to Date

The rollforward of the Company's allowance for credit losses related to trade accounts receivable, which is recorded in trade accounts receivable, less allowance in the consolidated balance sheet, is as follows (in millions of dollars):

First Quarter

Allowance for credit losses:

5 unchanged sentences

Ending balance $ 7.0 $ 5.9

Write-offs are presented net of recoveries, which were not material for third quarter-end 2024 or 2023.

As of third quarter-end 2024 , the Company has a receivable of $ 17.6 million related to the sale of our EMEA staffing operations (see Acquisition and Disposition footnote).

The Company has determined that no credit loss provision is required on this receivable as it is consid ered collectible.

No other allowances related to other receivables were material as of third quarter-end 2024 or 2023.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Acquisition and Disposition

Write-offs are presented net of recoveries, which were not material for first quarter-end 2025 or 2024.

As of first quarter-end 2025, the Company has a receivable of $ 17.0 million related to the sale of the EMEA staffing operations (see Acquisitions and Disposition footnote).

The Company has determined that no credit loss provision is required on this receivable as it is considered collectible.

No other allowances related to other receivables were material as of first quarter-end 2025 or 2024.

Acquisitions and Disposition

Children's Therapy Center

On November 13, 2024, Kelly Services USA, LLC (“KSU”), a wholly owned subsidiary of the Company, acquired 100 % of the issued and outstanding limited liability company interests of Children's Therapy Center (“CTC”).

CTC specializes in occupational, physical, and speech therapy for children and expands the Company's growth opportunities in therapeutic services.

Under terms of the purchase agreement, the purchase price of $ 3.3 million was adjusted for cash held by CTC at the closing date and estimated working capital adjustments, resulting in the company paying cash of $ 3.1 million.

In the first quarter of 2025, the Company received a post-close net working capital adjustment of $ 0.1 million.

Goodwill generated from the acquisition of $ 2.9 million, net of the net working capital adjustment, was primarily attributable to expanding market potential and was assigned to the Education operating segment (see Goodwill footnote).

CTC's results of operations are included in the Education segment.

Motion Recruitment Partners

On May 31, 2024, the Company indirectly acquired 100 % of the equity interests in Motion Recruitment Partners, LLC (“MRP”) by way of a merger with MRP Merger Sub, Inc.

5 unchanged sentences

Total consideration included $ 3.4 million of contingent consideration related to an earnout payment with a maximum potential cash payment of $ 60.0 million in the event certain financial metrics are met per the terms of the agreement.

The earnout payment is based on a multiple of gross profit in excess of an agreed-upon amount during the earnout period, defined as the 12 months ending March 31, 2025, and any necessary payment is due to the seller in the second quarter of 2025.

The initial fair value of the earnout was established using a Monte Carlo simulation model and is reassessed on a quarterly basis (see Fair Value Measurements footnote).

In the third quarter of 2024, the Company recorded a payable in accounts payable and accrued liabilities in the consolidated balance sheet for a post-close net working capital adjustment of $ 1.4 million which will be paid in the fourth quarter of 2024.

The earnout payment was based on a multiple of gross profit in excess of an agreed-upon amount during the earnout period, defined as the 12 months ending March 31, 2025, with any necessary payment due to the seller in second quarter of 2025.

The initial fair value of the earnout was established using a Monte Carlo simulation model, reassessed quarterly, and was written down to zero in the fourth quarter of 2024.

As of first quarter-end 2025, the value remained at zero , and no liability is recorded (see Fair Value Measurements footnote).

The merger agreement contains representations and warranties and covenants customary for a transaction of this nature.

The total consideration is as follows (in millions of dollars):

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The total consideration was as follows (in millions of dollars):

Cash consideration paid $ 425.0

6 unchanged sentences

The purchase price allocation for this acquisition is preliminary and could change.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition (in millions of dollars):

Cash and equivalents $ 12.6

Trade accounts receivable 89.1

Prepaid expenses and other current assets 8.5

Net property and equipment 3.1

Operating lease right-of-use assets 11.9

Goodwill 222.9

Intangibles, net 145.9

Other assets, noncurrent 10.6

Accounts payable and accrued liabilities, current ( 12.1 )

Operating lease liabilities, current ( 4.0 )

Accrued payroll and related taxes, current ( 15.9 )

Income and other taxes, current ( 0.5 )

Operating lease liabilities, noncurrent ( 9.0 )

Other long-term liabilities ( 18.3 )

Total consideration, including working capital adjustments $ 444.8

The fair value of the acquired receivables represents the contractual value net of the allowance for potentially uncollectible accounts.

Included in the assets purchased in the MRP acquisition was $ 145.9 million of intangible assets, made up of $ 88.1 million in customer relationships, $ 56.5 million associated with MRP's trade names, and $ 1.3 million for non-compete agreements.

The customer relationships are amortized over 15 years with no residual value, the trade names are amortized over 10 - 15 years with no residual value, and the non-compete agreements are amortized over four years with no residual value.

Goodwill generated from the acquisition was primarily attributable to expanding market potential and the expected revenue and operational synergies and was assigned to the SET operating segment (see Goodwill footnote).

None of the goodwill generated from the acquisition is expected to be deductible for tax purposes.

MRP's results of operations are included in the SET segment.

For the third quarter-end 2024, our consolidated revenues and net earnings include $ 124.6 million and $ 2.3 million from MRP, respectively.

For September year-to-date 2024, our consolidated revenues and net earnings include $ 164.6 million and $ 3.9 million from MRP, respectively.

Pro Forma Information

The following unaudited pro forma information presents a summary of the operating results as if the MRP acquisition had been completed as of January 2, 2023 (in millions of dollars):

Third Quarter September Year to Date

2024 2023 2024 2023

Pro forma revenues $ 1,038.1 $ 1,254.0 $ 3,361.1 $ 4,023.9

Pro forma net earnings $ 1.9 $ 6.8 $ 25.1 $ 19.2

The pro forma results for the periods above include adjustments to amortization expense for the intangible assets, reversal of MRP's interest expense on credit facilities that were settled upon completion of the acquisition, interest expense and associated amortization of debt issuance costs for financing the acquisition, reclassification of transaction expenses to the appropriate period, and applicable taxes.

The unaudited pro forma information presented has been prepared for comparative purposes only

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

and is not necessarily indicative of the results of operations as they would have been had the acquisition occurred on the assumed date, nor is it necessarily an indication of future operating results.

MRP's results of operations are included in the ETM and SET segments.

Disposition of EMEA Staffing Operations

On January 2, 2024, the Company completed the sale of its EMEA staffing operations ("disposal group"), which was included in the Company's International operating segment, to Gi Group Holdings S.P.A.

Upon closing, the Company received cash proceeds of $ 110.6 million, or $ 77.1 million net of cash disposed, which is included in investing activities in the consolidated statements of cash flows.

On January 2, 2024, the Company completed the sale of its EMEA staffing operations (“disposal group”), which was included in the Company's former International operating segment, to Gi Group Holdings S.P.A.

Upon closing, the Company received cash proceeds of $ 110.6 million, or $ 77.1 million net of cash disposed, which was included in investing activities in the consolidated statements of cash flows.

The total gain on the transaction as of first quarter-end 2024 was $ 11.6 million, which was recorded in the gain on sale of EMEA staffing operations in the consolidated statements of earnings.

The Company expects to receive additional net cash proceeds to reflect the cash-free, debt-free transaction basis, as well as working capital and other adjustments.

The Company does not expect to receive any proceeds from the contingent consideration opportunity associated with the transaction.

The Company will not receive any proceeds from the contingent consideration opportunity associated with the transaction.

In the first quarter of 2024, the Company recorded a euro-denominated receivable from Gi of $ 26.9 million representing the adjustments that were determinable and expected to be received.

In the second quarter of 2024, the Company recorded negative working capital and other adjustments of $ 10.1 million, which reduced the net receivable from Gi to $ 16.8 million.

As of the third quarter-end 2024, the net receivable is $ 17.6 million, with the change of $ 0.8 million from the second quarter reflecting the foreign currency remeasurement.

In the second quarter of 2024, the Company recorded negative working capital and other adjustments of $ 10.1 million, which reduced the net receivable from Gi.

As of first quarter-end 2025, the net receivable was $ 17.0 million, compared to $ 16.4 million as of year-end 2024, with the change of $ 0.6 million related to foreign currency remeasurements during the first quarter of 2025.

The Company is actively reconciling the receivable in accordance with the purchase agreement and expects it to be settled upon completion of this process.

The receivable is included in prepaid expenses and other current assets in the consolidated balance sheet and included in the gain on the transaction.

The total gain on the transaction through third quarter-end 2024 is $ 1.6 million, which is recorded in the gain on sale of EMEA staffing operations in the consolidated statements of earnings.

The disposal group did not meet the requirements to be classified as discontinued operations as the sale did not have a material effect on the Company's operations and did not represent a strategic shift in the Company's strategy.

Our consolidated earnings from operations for the third quarter 2023 and September year-to-date 2023 included earnings of $ 0.8 million and a loss of $ 1.1 million, respectively, from the EMEA staffing operations.

The major classes of divested assets and liabilities were as follows (in millions of dollars):

Assets divested

Cash and equivalents $ 33.5

Trade accounts receivable, net 202.8

Prepaid expenses and other current assets 29.0

Property and equipment, net 4.2

Operating lease right-of-use assets 14.2

Deferred taxes 4.1

Other assets 5.4

Assets divested 293.2

Liabilities divested

Accounts payable and accrued liabilities ( 24.5 )

Operating lease liabilities, current ( 5.7 )

Accrued payroll and related taxes ( 91.6 )

Income and other taxes ( 32.9 )

Operating lease liabilities, noncurrent ( 8.9 )

Accrued retirement benefits ( 1.7 )

Other long-term liabilities ( 4.6 )

Liabilities divested ( 169.9 )

Disposal group, net $ 123.3

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fair Value Measurements

Trade accounts receivable, short-term borrowings, accounts payable, accrued liabilities and accrued payroll and related taxes approximate their fair values due to the short-term maturities of these assets and liabilities.

Long-term debt is related to revolving credit agreements and their carrying values approximate fair value as the interest rates are variable and reflect current market rates.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present assets and liabilities measured at fair value on a recurring basis as of third quarter-end 2024 and year-end 2023 in the consolidated balance sheet by fair value hierarchy level, as described below.

The following tables present assets and liabilities measured at fair value on a recurring basis as of first quarter-end 2025 and year-end 2024 in the consolidated balance sheet by fair value hierarchy level, as described below.

Level 1 measurements consist of unadjusted quoted prices in active markets for identical assets or liabilities.

1 unchanged sentence

Level 3 measurements include significant unobservable inputs.

As of Third Quarter-End 2024

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of First Quarter-End 2025

Description Total Level 1 Level 2 Level 3

2 unchanged sentences

Total assets at fair value $ 5.9 $ 5.9 $ — $ —

Foreign currency forward contract, net $ ( 0.6 ) $ — $ ( 0.6 ) $ —

Interest rate swaps $ ( 0.3 ) $ — $ ( 0.3 ) $ —

Brazil indemnification ( 2.7 ) — — ( 2.7 )

EMEA staffing indemnification ( 2.1 ) — — ( 2.1 )

MRP earnout ( 3.4 ) — — ( 3.4 )

Brazil indemnification ( 0.9 ) — — ( 0.9 )

Total liabilities at fair value $ ( 3.3 ) $ — $ ( 0.3 ) $ ( 3.0 )

4 unchanged sentences

Total assets at fair value $ 6.4 $ 6.4 $ — $ —

Interest rate swaps $ ( 0.4 ) $ — $ ( 0.4 ) $ —

EMEA staffing indemnification ( 2.0 ) — — ( 2.0 )

Brazil indemnification ( 1.7 ) — — ( 1.7 )

Foreign currency forward contract, net ( 3.6 ) — ( 3.6 ) —

Total liabilities at fair value $ ( 4.1 ) $ — $ ( 0.4 ) $ ( 3.7 )

Money Market Funds

Money market funds represent investments in money market funds that hold government securities, of which $ 6.9 million as of third quarter-end 2024 and $ 8.0 million as of year-end 2023 are restricted as to use and are included in other assets in the consolidated balance sheet.

The money market funds that are restricted as to use account for the majority of our restricted cash balance and represents cash balances that are required to be maintained to fund disability claims in California.

The remaining money market funds as of year-end 2023 are included in cash and equivalents in the consolidated balance sheet.

Money market funds represent investments in money market funds that hold government securities, all of which are restricted as to use as of first quarter-end 2025 and year-end 2024, and are included in other assets in the consolidated balance sheet.

These restricted funds represent cash balances that are required to be maintained to fund disability claims in California.

The valuations of money market funds are based on quoted market prices of those accounts as of the respective period end.

Forward Contracts

On February 8, 2024, the Company entered into a foreign currency forward contract with a notional amount of € 17.0 million to manage the foreign currency risk associated with expected additional proceeds related to the sale of our EMEA staffing operations (see Acquisition and Disposition footnote).

The expected proceeds are recorded as a euro-denominated receivable

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

which is remeasured each period.

On February 8, 2024, the Company entered into a foreign currency forward contract with a notional amount of € 17.0 million to manage the foreign currency risk associated with expected additional proceeds related to the sale of the Company's EMEA staffing operations (see Acquisitions and Disposition footnote).

The expected proceeds were recorded as a euro-denominated receivable which was remeasured quarterly.

The forward contract was designated as a fair value hedge, with the mark-to-market changes of the forward contract offsetting the mark-to-market changes of the receivable in the gain on sale of EMEA staffing operations in the consolidated statements of earnings.

The contract was valued using observable inputs, such as foreign currency exchange rates, and is considered a level 2 liability.

In the first nine months of 2024, the Company has recorded an unrealized loss of $ 0.6 million with a net payable associated with the forward contract of $ 0.6 million recorded in accounts payable and accrued liabilities on the consolidated balance sheet as of third quarter-end 2024.

On November 2, 2023, the Company entered into a foreign currency forward contract with a notional amount of € 90.0 million to manage the foreign currency risk associated with the sale of our EMEA staffing operations, which was completed on January 2, 2024.

The contract was valued using observable inputs, such as foreign currency exchange rates, and was considered a level 2 liability.

In the fourth quarter of 2024, the Company settled the contract with a $ 0.4 million cash payment and recognized a corresponding loss of $ 0.4 million on the contract.

Accordingly, as of year-end 2024, there was no asset or liability related to this forward contract.

On November 2, 2023, the Company entered into a foreign currency forward contract with a notional amount of € 90.0 million to manage the foreign currency risk associated with the sale of the EMEA staffing operations, which was completed on January 2, 2024.

This contract was not designated as a hedging instrument;

1 unchanged sentence

The Company's foreign currency forward contract was valued using observable inputs, such as foreign currency exchange rates, and was considered a level 2 liability.

The Company recorded an unrealized loss of $ 3.6 million for the year-ended 2023 and had a net liability associated with the forward contract of $ 3.6 million as of year-end 2023.

The Company settled the forward contract on January 5, 2024 for $ 2.4 million of cash.

The Company recorded an unrealized loss of $ 3.6 million for the year ended 2023 and settled the forward contract on January 5, 2024 for $ 2.4 million of cash.

Accordingly, the Company recognized a gain of $ 1.2 million in the first quarter of 2024 in gain on forward contract on the consolidated statements of earnings, which partially offsets the $ 3.6 million loss recognized in 2023, for a total loss of $ 2.4 million on the contract.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Interest Rate Swaps

On July 17, 2024, the Company entered into two interest rate swaps with a notional value of $ 50.0 million each to manage fluctuations on our securitization facility due to Secured Overnight Financing Rate ("SOFR") variances (see Debt footnote).

On July 17, 2024, the Company entered into two interest rate swaps with a notional value of $ 50.0 million each to manage Secured Overnight Financing Rate (“SOFR”) fluctuations on the securitization facility (see Debt footnote).

These contracts were not designated as hedging instruments;

therefore, the mark-to-market fair value changes and the cash settlements on the swaps are recognized in earnings.

The Company's interest rate swaps were valued with assistance from a third party based on pricing models using observable inputs, such as SOFR forward rates, and are considered level 2 liabilities, which will be remeasured quarterly.

As of third quarter-end 2024, the Company recorded a liability totaling $ 0.8 million related to the mark-to-market fair value change of the interest rate swaps with $ 0.6 million in accounts payable and accrued liabilities and $ 0.2 million in other long-term liabilities in the consolidated balance sheet.

In the third quarter of 2024, the Company recorded a total loss of $ 0.7 million.

This loss includes $ 0.8 million related to mark-to-market changes in fair value, which was partially offset by the impact of cash settlements of $ 0.1 million, in other income (expense), net in the consolidated statements of earnings.

As of first quarter-end 2025 and year-end 2024, the Company recorded a liability totaling $ 0.3 million and $ 0.4 million, respectively, related to the mark-to-market fair value of the interest rate swaps in accounts payable and accrued liabilities in the consolidated balance sheet.

The net gains and losses recorded in other income (expense), net in the consolidated statements of earnings related to these swaps were not significant for the first quarter of 2025.

Indemnification Liabilities

As of third quarter-end 2024, the Company had an indemnification liability totaling $ 2.1 million relating to the sale of our EMEA staffing operations in January 2024.

As of first quarter-end 2025 and year-end 2024, the Company had an indemnification liability totaling $ 2.1 million and $ 2.0 million, respectively, relating to the sale of the EMEA staffing operations in January 2024, with the increase attributable to exchange rate fluctuations.

The liability is included in other long-term liabilities in the consolidated balance sheet and the associated expense is included in the gain on sale of EMEA staffing operations in the consolidated statements of earnings.

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The valuation, which represents the fair value, is considered a level 3 liability and is measured on a recurring basis.

During the third quarter of 2024, the Company recognized an increase of $ 0.1 million to the indemnification liability related to exchange rate fluctuations.

As of third quarter-end 2024, the Company had an indemnification liability totaling $ 2.7 million with $ 0.1 million in accounts payable and accrued liabilities and $ 2.6 million in other long-term liabilities, and $ 3.0 million at year-end 2023, with $ 0.1 million in accounts payable and accrued liabilities and $ 2.9 million in other long-term liabilities in the consolidated balance sheet related to the 2020 sale of the Brazil operations.

As of first quarter-end 2025, the Company has an indemnification liability totaling $ 0.9 million in other long-term liabilities, and $ 1.7 million at year-end 2024, with $ 0.9 million in accounts payable and accrued liabilities and $ 0.8 million in other long-term liabilities in the consolidated balance sheet related to the 2020 sale of the Brazil operations.

As part of the sale, the Company agreed to indemnify the buyer for losses and costs incurred in connection with certain events or occurrences initiated within a six-year period after closing.

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The valuation, which represents the fair value, is considered a level 3 liability, and is being measured on a recurring basis.

During September year-to-date 2024 and 2023, the Company recognized

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

an increase of $ 0.1 million to the indemnification liability related to exchange rate fluctuations in other income (expense), net in the consolidated statements of earnings.

During the first quarter of 2025, the Company made a payment in the amount of $ 0.9 million with the remainder of the change in the balance attributable to exchange rate fluctuations.

Earnout Liabilities

The Company recorded an earnout liability relating to the 2024 acquisition of MRP totaling $ 3.4 million in accounts payable and accrued liabilities in the consolidated balance sheet (see Acquisition and Disposition footnote).

In the second quarter of 2024, the Company recorded an earnout liability relating to the 2024 acquisition of MRP totaling $ 3.4 million (see Acquisitions and Disposition footnote).

The valuation of the earnout liability was initially established using the Monte Carlo simulation model and represented the fair value and is considered a level 3 liability.

The maximum total cash payment which may be due related to the earnout liability is $ 60.0 million.

The Company had previously recorded an earnout liability relating to the 2020 acquisition of Greenwood/Asher.

The initial valuation of the earnout liability was established using a Black Scholes model and represented the fair value and was considered a level 3 liability.

During the first quarter of 2023, the Company paid the remaining earnout liability totaling $ 3.3 million, representing the year two portion of the earnout.

In the consolidated statements of cash flows, $ 1.4 million of the payment is reflected as a financing activity representing the initial fair value of the earnout liability, with the remainder flowing through operating activities.

The maximum total cash payment related to the earnout liability was $ 60.0 million.

In the fourth quarter of 2024, the liability was reassessed and the fair value was determined to be zero .

As of first quarter-end 2025, the value remained at zero and no further liability will be recognized as the earnout period has concluded.

Equity Investment Without Readily Determinable Fair Value

On March 1, 2022, the Company sold the majority of its investment in PersolKelly Pte.

Prior to February 2022, the Company had a 49 % ownership interest in the JV, a staffing services business currently operating in ten geographies in the Asia-Pacific region.

The Company holds a 2.5 % interest in the JV, which is measured using the measurement alternative for equity investments without a readily determinable fair value.

In 2022, the Company invested in equity securities with an initial investment of $ 0.4 million which was included in other assets in the consolidated balance sheet.

This investment is measured using the measurement alternative for equity investments without a readily determinable fair value.

The measurement alternative represents cost, less impairment, plus or minus observable price changes.

The investment totaled $ 6.4 million as of third quarter-end 2024, representing total cost plus observable price changes to date.

Restructuring and Transformation Activities

The Company had no restructuring or transformation charges during the third quarter of 2024.

Restructuring and transformation charges for the nine months ended September 29, 2024 were $ 6.4 million as a continuation of the actions that were announced in the second quarter of 2023 as part of the comprehensive transformation initiative.

The transformation activities consisted of $ 3.3 million of severance charges and $ 3.1 million of costs to execute the transformation.

The severance and transformation costs are recorded in selling, general and administrative ("SG&A") expenses in the consolidated statements of earnings.

Additionally, in the second quarter of 2024, the Company recognized an impairment charge of $ 5.5 million for certain right-of-use assets related to our leased headquarters facility reflecting adjustments as to how we are utilizing the building as a part of our ongoing transformation efforts.

The impairment charge related to the right-of-use assets was recorded in the asset impairment charge in the consolidated statements of earnings.

The restructuring and transformation costs included in SG&A are detailed below for September year-to-date 2024 (in millions of dollars):

September Year-to-Date 2024

Costs Transformation Costs Total

Professional & Industrial $ 0.4 $ — $ 0.4

Science, Engineering & Technology 0.3 — 0.3

Outsourcing & Consulting 0.5 — 0.5

Corporate 2.1 3.1 5.2

Total $ 3.3 $ 3.1 $ 6.4

In the fourth quarter of 2024, the Company entered into a transaction to sell a portion of its shares and as a result of the sale, the value of the remaining investment was remeasured at $ 3.5 million as of year-end 2024.

As of first quarter-end 2025, the value of the investment is $ 3.5 million, representing total cost plus observable price changes to date.

In the first quarter of 2025, the Company sold its 2.5 % interest in PersolKelly Pte.

for cash proceeds of $ 6.4 million.

The investment was measured using the measurement alternative for equity investments without a readily determinable fair value

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In the first quarter of 2023, the Company undertook restructuring actions to further our cost management efforts in response to the demand levels and to reflect a repositioning of our P&I staffing business to better capitalize on opportunities in local markets.

Restructuring costs incurred in the first quarter of 2023 totaled $ 6.6 million and were recorded entirely in SG&A expenses in the consolidated statements of earnings.

In the second quarter of 2023, the Company announced a comprehensive transformation initiative that included actions to further streamline the Company's operating model to enhance organizational efficiency and effectiveness.

The total costs incurred related to these transformation activities in the second quarter of 2023 totaled $ 8.0 million.

The transformation activities included $ 4.5 million of costs to execute the transformation initiatives through the use of an external consultant, a $ 2.4 million impairment charge for right-of-use assets related to an unoccupied office space lease and additional severance of $ 1.1 million, net of adjustments.

The impairment charge related to the right-of-use assets was recorded in the asset impairment charge in the consolidated statements of earnings.

The costs to execute and severance were included in the $ 5.6 million of restructuring costs incurred in the second quarter of 2023, net of prior period adjustments, and were recorded in SG&A expenses in the consolidated statements of earnings, as detailed further below.

In the third quarter of 2023, the Company incurred $ 15.4 million of restructuring charges and transformation fees as a continuation of the actions that were announced in the second quarter of 2023 as part of the comprehensive transformation initiative.

The third quarter transformation activities included $ 10.4 million of additional severance, $ 4.5 million of costs to execute the transformation through the use of an external consultant, and $ 0.5 million of lease termination costs.

The severance, costs to execute, and lease termination costs were recorded in SG&A expenses in the consolidated statements of earnings.

The restructuring and transformation costs included in SG&A are detailed below for the third quarter and September year-to-date 2023 (in millions of dollars):

Third Quarter 2023 September Year-to-Date 2023

Costs Lease Termination Costs,

Transformation

and Other Total Severance

Costs Lease Termination Costs,

Transformation

and Other Total

Professional & Industrial $ 3.6 $ 0.4 $ 4.0 $ 6.6 $ 0.7 $ 7.3

and had a carrying value of $ 6.4 million as of year-end 2024 and at the time of the sale, representing total cost plus observable price changes to date.

As a result, the sale had no impact on other income (expense), net in the consolidated statements of earnings in the first quarter of 2025.

Integration, Realignment and Restructuring

In the first quarter of 2025, the Company launched various initiatives aimed at integrating MRP and other prior acquisitions, combining operating segments, and further aligning processes and technology across the Company.

The costs incurred related to these integration and realignment initiatives totaled $ 10.7 million during the first quarter of 2025.

The integration and realignment costs consisted of $ 5.3 million of IT-related charges, $ 4.4 million of severance and $ 1.0 million of fees and other costs to execute the initiatives.

The severance costs incurred as a part of these efforts are accounted for in accordance with ASC 712 Compensation - Nonretirement Postemployment Benefits .

The integration and realignment costs are recorded in selling, general and administrative (“SG&A”) expenses in the consolidated statements of earnings.

The integration and realignment costs included in SG&A are detailed below (in millions of dollars):

First Quarter 2025

IT-related Charges Severance Fees and Other Total

Enterprise Talent Management $ — $ 2.7 $ — $ 2.7

Science, Engineering & Technology — 1.1 — 1.1

Education 0.6 — 0.6 1.0 — 1.0

Outsourcing & Consulting 1.8 — 1.8 2.3 — 2.3

International — — — 0.6 — 0.6

Corporate 5.3 0.6 1.0 6.9

Total $ 5.3 $ 4.4 $ 1.0 $ 10.7

In the first quarter of 2024, the Company incurred $ 2.3 million of restructuring charges and transformation fees as a continuation of the comprehensive transformation initiative that was announced in the second quarter of 2023.

The transformation activities included $ 1.1 million of severance and $ 1.2 million of costs to execute the transformation through the use of an external consultant.

The Company's 2024 restructuring actions are complete with no remaining liability as of first quarter-end 2025.

No material adjustments are expected to be recorded.

The restructuring and transformation costs included in SG&A are detailed below (in millions of dollars):

First Quarter 2024

Costs Transformation Costs Total

Enterprise Talent Management $ 0.7 $ — $ 0.7

Corporate 0.4 1.2 1.6

Total $ 1.1 $ 1.2 $ 2.3

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Accrual Summary

A summary of the global restructuring balance sheet accrual, included in accrued payroll and related taxes and accounts payable and accrued liabilities in the consolidated balance sheet, is detailed below (in millions of dollars):

Balance as of year-end 2023 $ 15.1

Reductions for cash payments ( 11.0 )

Disposition of EMEA staffing operations ( 1.5 )

Accrual adjustments ( 0.2 )

Balance as of first quarter-end 2024 4.7

Reductions for cash payments ( 4.4 )

Balance as of second quarter-end 2024 4.6

Reductions for cash payments ( 2.0 )

Accrual adjustments ( 0.2 )

Balance as of third quarter-end 2024 $ 2.4

The remaining balance of $ 2.4 million as of third quarter-end 2024 primarily represents the costs to execute the transformation initiatives and severance costs, and the majority is expected to be paid by the end of 2024.

No material adjustments are expected to be recorded.

The changes in the carrying amount of goodwill through September year-to-date 2024 are included in the table below (in millions of dollars).

The changes in the carrying amount of goodwill through first quarter-end 2025 are included in the table below (in millions of dollars).

The goodwill of $ 3.0 million resulting from the acquisition of CTC during the fourth quarter of 2024 was allocated to the Education reportable segment.

In the first quarter of 2025, the Company received a post-close net working capital adjustment of $ 0.1 million related to the acquisition of CTC.

The goodwill of $ 221.5 million resulting from the acquisition of MRP during the second quarter of 2024 was allocated to the SET reportable segment.

During the third quarter of 2024, the Company recorded a $ 1.4 million liability for a net working capital adjustment related to the acquisition of MRP.

The adjustment resulted in a $ 1.4 million addition of goodwill, which was allocated to the SET reportable segment (see Acquisition and Disposition footnote).

Year-End 2023 Additions to Goodwill Impairment Adjustments As of Third

Quarter-End 2024

Science, Engineering & Technology $ 111.3 $ 222.9 $ — $ 334.2

Education 39.8 — — 39.8

Total $ 151.1 $ 222.9 $ — $ 374.0

The adjustment resulted in a $ 1.4 million addition of goodwill, which was allocated to the SET reportable segment (see Acquisitions and Disposition footnote).

During the first quarter of 2025, the Company changed its reportable segments as discussed in the Segment Disclosures footnote, which included moving MRP's Sevenstep business from the SET reportable segment to the ETM reportable segment as part of the broader integration of MRP.

Concurrent with this change in reportable segments, the Company reallocated $ 22.3 million of goodwill related to the Sevenstep business formerly in the SET reportable segment to the ETM reportable segment using a relative fair value approach.

Science, Engineering & Technology Education Enterprise Talent Management Total

Balance as of year-end 2023 $ 111.3 $ 39.8 $ — $ 151.1

Additions 222.9 3.0 — 225.9

Impairment adjustments ( 72.8 ) — — ( 72.8 )

Balance as of year-end 2024 261.4 42.8 — 304.2

Adjustments — ( 0.1 ) — ( 0.1 )

Reallocation ( 22.3 ) — 22.3 —

Balance as of first quarter-end 2025 $ 239.1 $ 42.7 $ 22.3 $ 304.1

Revolving Credit Facility

On May 29, 2024, the Company entered into an agreement with its lenders to amend and restate its existing $ 200.0 million, five-year revolving credit facility (the "Facility"), with a termination date of May 29, 2029.

The amendment (i) decreased the current borrowing capacity to $ 150.0 million, (ii) added the ability to increase the borrowing capacity to an aggregate of $ 300.0 million and (iii) changed certain of the terms and conditions.

The Company has a $ 150.0 million, five-year revolving credit facility (the “Facility”), with a termination date of May 29, 2029.

The Facility is available to be used to fund working capital, acquisitions and general corporate needs.

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trade accounts receivable.

At the end of the third quarter of 2024, there were $ 40.0 million of long-term borrowings on the term benchmark line under the Facility and a remaining borrowing capacity of $ 110.0 million.

The rate for these borrowings, which varies based on the Company's leverage ratio as defined in the agreement, includes either (i) the Prime rate plus the applicable margin for the

At the end of the first quarter of 2025, there were $ 30.0 million of long-term borrowings on the term benchmark line under the Facility and a remaining borrowing capacity of $ 120.0 million.

The rate for these borrowings, which varies based on the Company's leverage ratio as defined in the agreement, includes either (i) the Prime rate plus the applicable margin for the floating line or (ii) a term SOFR for 1-, 3-, or 6-months dependent on the interest election plus a 0.10 % margin and the applicable margin for the term benchmark line.

At year-end 2024, there were $ 40.0 million of long-term borrowings on the term benchmark line under the Facility and a remaining borrowing capacity of $ 110.0 million.

To maintain availability of the funds, the Company pays a facility fee on the full amount of the Facility, regardless of usage.

The facility fee varies based on the Company’s leverage ratio as defined in the agreement.

The Facility, which contains a cross-default clause that could result in termination if defaults occur under the Company's other loan agreements, had a facility fee of 20.0 basis points at the end of the first quarter of 2025 and at year-end 2024.

The Facility’s financial covenants and restrictions are described below, all of which were met at the end of the first quarter of 2025:

• The Company must maintain a certain minimum interest coverage ratio of earnings before interest, taxes, depreciation, amortization (“EBITDA”) and certain cash and non-cash charges that are non-recurring in nature to interest expense as of the end of any fiscal quarter.

• The Company must maintain a certain maximum ratio of total indebtedness to the sum of net worth and total indebtedness at all times.

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

floating line or (ii) a term SOFR for 1-, 3-, or 6-months dependent on the interest election plus a 0.10 % margin and the applicable margin for the term benchmark line.

At year-end 2023, there were no borrowings under the Facility and a remaining borrowing capacity of $ 200.0 million.

To maintain availability of the funds, we pay a facility fee on the full amount of the Facility, regardless of usage.

The facility fee varies based on the Company’s leverage ratio as defined in the agreement.

The Facility, which contains a cross-default clause that could result in termination if defaults occur under our other loan agreements, had a facility fee of 20.0 basis points at the end of the third quarter of 2024 and 15.0 basis points at year-end 2023.

The Facility’s financial covenants and restrictions are described below, all of which were met at the end of the third quarter of 2024:

• We must maintain a certain minimum interest coverage ratio of earnings before interest, taxes, depreciation, amortization (“EBITDA”) and certain cash and non-cash charges that are non-recurring in nature to interest expense as of the end of any fiscal quarter.

• We must maintain a certain maximum ratio of total indebtedness to the sum of net worth and total indebtedness at all times.

• Dividends, stock buybacks and similar transactions are limited to certain maximum amounts.

• We must adhere to other operating restrictions relating to the conduct of business, such as certain limitations on asset sales and the type and scope of investments.

• The Company must adhere to other operating restrictions relating to the conduct of business, such as certain limitations on asset sales and the type and scope of investments.

Securitization Facility

On May 29, 2024, the Company and Kelly Receivables Funding, LLC, a wholly owned bankruptcy remote special purpose subsidiary of the Company (the “Receivables Entity”), amended the Receivables Purchase Agreement related to its $ 150.0 million, three-year , securitization facility (the “Securitization Facility”).

The amendment (i) increased the current borrowing capacity to $ 250.0 million, (ii) includes the ability to increase the borrowing capacity to an aggregate of $ 350.0 million and (iii) changed certain of the terms and conditions.

The Company has a Receivables Purchase Agreement with Kelly Receivables Funding, LLC, a wholly owned bankruptcy remote special purpose subsidiary of the Company (the “Receivables Entity”), related to its $ 250.0 million, three-year , securitization facility (the “Securitization Facility”).

The Receivables Purchase Agreement will terminate May 28, 2027, unless terminated earlier pursuant to its terms.

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The Receivables Entity may from time to time sell an undivided variable percentage ownership interest in the Receivables.

The Securitization Facility, which contains a cross-default clause that could result in termination if defaults occur under our other loan agreements, also allows for the issuance of standby letters of credit (“SBLC”) and contains certain restrictions based on the performance of the Receivables.

At the end of the third quarter of 2024, the Securitization Facility had $ 188.2 million of long-term borrowings, SBLCs of $ 46.1 million related to workers’ compensation and a remaining capacity of $ 15.7 million.

The rate for these borrowings includes the adjusted daily SOFR plus a 0.10 % margin and a 1.10 % utilization rate on the amount of our borrowings.

The Securitization Facility, which contains a cross-default clause that could result in termination if defaults occur under the Company's other loan agreements, also allows for the issuance of standby letters of credit (“SBLC”) and contains certain restrictions based on the performance of the Receivables.

At the end of the first quarter of 2025, the Securitization Facility had $ 174.6 million of long-term borrowings, SBLCs of $ 42.6 million related to workers’ compensation and a remaining capacity of $ 32.8 million.

The rate for these borrowings includes the adjusted daily SOFR plus a 0.10 % margin and a 1.10 % utilization rate on the amount of the Company's borrowings.

The rate for the SBLCs of 1.10 % represents a utilization rate on the outstanding balance.

In addition, we pay a commitment fee of 40.0 basis points on the unused capacity.

At year-end 2023, the Securitization Facility had no borrowings, SBLCs of $ 49.4 million related to workers’ compensation at a utilization rate of 0.90 % and a remaining capacity of $ 100.6 million.

In addition, we paid a commitment fee of 40.0 basis points on the unused capacity in 2023.

On July 17, 2024, we entered into a $ 50.0 million 12-month interest rate swap and a $ 50.0 million 18-month interest rate swap that effectively locked in the variable SOFR component of our interest rate for a portion of the long-term borrowings on the Securitization Facility at a fixed rate of 4.772 % and 4.468 % from the July 17, 2024 effective date through July 17, 2025 and January 17, 2026, respectively.

At the end of the third quarter of 2024, the Company recorded a loss and corresponding liability of $ 0.8 million related to mark-to-market changes in fair value of the interest rate swaps (see Fair Value Measurements footnote).

In addition, the Company pays a commitment fee of 40.0 basis points on the unused capacity.

At year-end 2024, the Securitization Facility had $ 199.4 million of long-term borrowings, SBLCs of $ 46.1 million related to workers’ compensation and a remaining capacity of $ 4.5 million.

On July 17, 2024, the Company entered into a $ 50.0 million 12-month interest rate swap and a $ 50.0 million 18-month interest rate swap that effectively locked in the variable SOFR component of the interest rate for a portion of the long-term borrowings on the Securitization Facility at a fixed rate of 4.772 % and 4.468 % from the July 17, 2024 effective date through July 17, 2025 and January 17, 2026, respectively.

At the end of the first quarter of 2025 and at year-end 2024, the Company recorded a liability totaling $ 0.3 million and $ 0.4 million, respectively, related to the mark-to-market fair value of the interest rate swaps (see Fair Value Measurements footnote).

The Receivables Entity’s sole business consists of the purchase or acceptance through capital contributions of trade accounts receivable and related rights from the Company.

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The assets and liabilities of the Receivables Entity are included in the consolidated financial statements of the Company.

Local Credit Facilities

The Company had total unsecured, uncommitted short-term local credit facilities of $ 3.1 million at the end of the first quarter of 2025.

The Company had no borrowings under these lines at the end of the first quarter of 2025 and at year-end 2024.

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Local Credit Facilities

The Company had total unsecured, uncommitted short-term local credit facilities of $ 3.2 million at the end of the third quarter of 2024.

The Company had $ 0.2 million of borrowings under these lines at the end of the third quarter of 2024, as compared to no borrowings under these lines at year-end 2023.

The weighted average interest rate for these borrowings, which was related to Malaysia, was 5.10 % at the end of the third quarter of 2024.

Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) by component, net of tax, for the third quarter and September year-to-date 2024 and 2023 are included in the table below.

Amounts in parentheses indicate debits.

Third Quarter September Year to Date

2024 2023 2024 2023

(In millions of dollars)

The changes in accumulated other comprehensive income (loss) by component, net of tax, for the first quarter of 2025 and 2024 are included in the table below (in millions of dollars).

First Quarter

Foreign currency translation adjustments:

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Earnings Per Share

The reconciliation of basic and diluted earnings per share on common stock for the third quarter and September year-to-date 2024 and 2023 follows (in millions of dollars except per share data):

Third Quarter September Year to Date

2024 2023 2024 2023

The reconciliation of basic and diluted earnings per share on common stock for the first quarter of 2025 and 2024 is as follows (in millions of dollars except per share data):

First Quarter

Net earnings $ 5.8 $ 25.8

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Diluted earnings per share $ 0.16 $ 0.70

Potentially dilutive share awards are related to deferred common stock related to the non-employee directors deferred compensation plan and performance shares for the third quarter and September year-to-date 2024 and 2023 (see Stock-Based Compensation footnote for a description of performance shares).

Dividends paid per share for Class A and Class B common stock were $ 0.075 for the third quarter of 2024 and 2023 and $ 0.225 for September year-to-date 2024 and 2023 .

In November 2022, the Company's board of directors authorized a $ 50.0 million Class A share repurchase program, which was completed in August 2023.

The Company repurchased 414,534 shares for $ 7.4 million during the third quarter of 2023 and 2,496,827 shares for $ 42.2 million through September year-to-date 2023.

A total of 2,971,471 shares were repurchased under the share repurchase program at an average price of $ 16.83 per share.

Potentially dilutive share awards are related to deferred common stock related to the non-employee directors deferred compensation plan and performance shares for the first quarter of 2025 and 2024 (see Stock-Based Compensation footnote for a description of performance shares).

Dividends paid per share for Class A and Class B common stock were $ 0.075 for the first quarter of 2025 and 2024.

In November 2024, the Company's board of directors authorized a $ 50.0 million Class A share repurchase program that expires on December 2, 2026.

During the first quarter of 2025, the Company did not repurchase any Class A shares.

A total of $ 40.0 million remains available under the share repurchase program as of first quarter-end 2025.

Stock-Based Compensation

For the third quarter of 2024, the Company recognized stock compensation expense of $ 3.3 million and a related tax benefit of $ 0.7 million.

For the third quarter of 2023, the Company recognized stock compensation expense of $ 2.3 million and a related tax benefit of $ 0.4 million.

For September year-to-date 2024, the Company recognized stock compensation expense of $ 8.5 million and a related tax benefit of $ 2.0 million.

For September year-to-date 2023, the Company recognized stock compensation expense of $ 7.9 million and a related tax benefit of $ 1.1 million.

For the first quarter of 2025, the Company recognized stock compensation expense of $ 3.7 million and a related tax benefit of $ 0.3 million.

For the first quarter of 2024, the Company recognized stock compensation expense of $ 2.8 million and a related tax benefit of $ 0.7 million.

Performance Shares

During the first quarter of 2025, the Company granted performance share awards associated with the Company’s Class A common stock to certain senior officers.

The payment of performance share awards is contingent upon the achievement of specific revenue growth and EBITDA margin performance goals ("financial measure performance share awards") over a stated period of time.

The payment of performance share awards is contingent upon the achievement of specific revenue growth and EBITDA margin performance goals over a stated period of time.

The maximum number of performance shares that may be earned is 200 % of the target shares originally granted.

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No dividends are paid on these performance shares.

In December 2021, the Compensation Committee approved a retention-based grant of 308,000 financial measure performance awards to certain senior officers which may be earned upon achievement of three financial goals over a performance period

A summary of the status of all nonvested performance shares at target as of first quarter-end 2025 and changes during this period is presented as follows below (in thousands of shares except per share data).

The vesting adjustment in the table below represents a portion of the 2022 performance shares that did not vest because actual achievement was below the threshold level or was not achieved, and resulted in no payout.

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

beginning in fiscal 2022 through the third quarter of 2024, with each goal having a unique projected achievement date.

Each goal can be earned independent of the other two goals.

Any shares earned during the performance period will cliff-vest three years after achievement of the respective performance goals and approval of the financial results by the Compensation Committee.

On May 7, 2024, the Compensation Committee confirmed the actual performance achievement for the final financial goal related to the 2021 retention-based grant, which was not achieved before the end of the performance period and resulted in no payout.

A summary of the status of all nonvested performance shares at target as of third quarter-end 2024 and September year-to-date 2024 changes is presented as follows below (in thousands of shares except per share data).

The vesting adjustment in the table below represents 2021 financial measure performance shares that did not vest because actual achievement was below the threshold level or was not achieved, and resulted in no payout.

Financial Measure

Performance Shares

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Vesting adjustment ( 28 ) 15.48

Nonvested at third quarter-end 2024 568 $ 18.66

Nonvested at first quarter-end 2025 669 $ 14.98

Restricted Stock

A summary of the status of nonvested restricted stock as of third quarter-end 2024 and September year-to-date 2024 changes is presented as follows below (in thousands of shares except per share data).

A summary of the status of nonvested restricted stock as of first quarter-end 2025 and changes during this period is presented as follows below (in thousands of shares except per share data).

Restricted Stock

Shares Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 31 ) 19.33

Nonvested at third quarter-end 2024 888 $ 19.65

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Sale of Assets

On June 10, 2024, the Company sold Ayers Group, a division of our OCG segment, for a purchase price of $ 7.5 million, subject to final closing adjustments.

The Company received cash proceeds of $ 4.5 million in the second quarter of 2024 for assets sold with a net carrying value of $ 1.0 million.

In the third quarter of 2024, a post-close net working capital adjustment of $ 0.1 million was recorded in loss (gain) on sale of assets in the consolidated statements of earnings for the third quarter of 2024.

A gain of $ 5.4 million was recorded in loss (gain) on sale of assets for the nine months ended September 29, 2024 in the consolidated statements of earnings.

The sale was a part of the Company's ongoing strategy to further optimize its operating model.

Nonvested at first quarter-end 2025 1,335 $ 16.91

Other Income (Expense), Net

Included in other income (expense), net for the third quarter and September year-to-date 2024 and 2023 are the following:

Third Quarter September Year to Date

2024 2023 2024 2023

Included in other income (expense), net for the first quarter of 2025 and 2024 are the following:

First Quarter

(In millions of dollars)

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Interest expense ( 4.0 ) ( 0.5 )

Foreign exchange gains (losses) ( 0.9 ) 0.5 ( 0.2 ) ( 1.5 )

Other — ( 0.5 )

Other income (expense), net $ ( 3.2 ) $ 1.8

The increase in Interest expense for the third quarter of 2024 reflects the increase in the Company's long-term debt (see Debt footnote).

Included in Other for September year-to-date 2024 is $ 7.8 million of transaction costs related to the acquisition of MRP (see Acquisition and Disposition footnote).

Included in Other for September year-to-date 2023 is a gain of $ 2.0 million for the receipt of earnout proceeds in connection with an investment that was sold in 2021.

Income tax benefit was $ 2.6 million for the third quarter of 2024 and income tax benefit was $ 4.9 million for the third quarter of 2023.

Income tax expense was $ 2.5 million for September year-to-date 2024 and income tax benefit was $ 5.0 million for September year-to-date 2023.

The quarterly and year-to-date changes are primarily driven by the release of Germany’s valuation allowance in the third quarter of 2023.

Our tax expense is affected by recurring items, such as the amount of pretax income and its mix by jurisdiction, U.S.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Income tax expense was $ 1.8 million for the first quarter of 2025 and $ 4.0 million for the first quarter of 2024.

The quarterly variance primarily relates to changes in pretax income.

The Company's tax expense is affected by recurring items, such as the amount of pretax income and its mix by jurisdiction, U.S.

work opportunity credits and the change in cash surrender value of tax-exempt investments in life insurance policies.

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The Company continues to monitor its partial foreign tax credit valuation allowance for potential changes in the near term.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Contingencies

The Company is continuously engaged in litigation, threatened litigation, claims, audits or investigations arising in the ordinary course of its business, such as matters alleging employment discrimination, wage and hour violations, claims for indemnification or liability, violations of privacy rights, anti-competition regulations, commercial and contractual disputes, and tax-related matters which could result in a material adverse outcome.

We record accruals for loss contingencies when we believe it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

The Company records accruals for loss contingencies when the Company believes it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

Such accruals are recorded in accounts payable and accrued liabilities and in accrued workers’ compensation and other claims in the consolidated balance sheet.

At third quarter-end 2024 and year-end 2023, the gross accrual for litigation costs amounted to $ 3.8 million and $ 6.4 million, respectively, of which $ 1.5 million was held for sale at year-end 2023.

At first quarter-end 2025 and year-end 2024, the gross accrual for litigation costs amounted to $ 1.4 million and $ 1.5 million, respectively.

The Company maintains insurance coverage which may cover certain losses.

When losses exceed the applicable policy deductible and realization of recovery of the loss from existing insurance policies is deemed probable, the Company records receivables from the insurance company for the excess amount, which are included in prepaid expenses and other current assets and other assets in the consolidated balance sheet.

At third quarter-end 2024 and year-end 2023, the related insurance receivables amounted to $ 1.1 million and $ 0.2 million, respectively.

The Company estimates the aggregate range of reasonably possible losses, in excess of amounts accrued, is $ 0.1 million to $ 1.4 million as of third quarter-end 2024.

At first quarter-end 2025 and year-end 2024, there were no related insurance receivables.

The Company estimates the aggregate range of reasonably possible losses, in excess of amounts accrued, is $ 0.5 million to $ 2.6 million as of first quarter-end 2025.

This range includes matters where a liability has been accrued but it is reasonably possible that the ultimate loss may exceed the amount accrued and for matters where a loss is believed to be reasonably possible, but a liability has not been accrued.

The aggregate range only represents matters in which we are currently able to estimate a range of loss and does not represent our maximum loss exposure.

The aggregate range only represents matters in which the Company is currently able to estimate a range of loss and does not represent the maximum loss exposure.

The estimated range is subject to significant judgment and a variety of assumptions and only based upon currently available information.

For other matters, we are currently not able to estimate the reasonably possible loss or range of loss.

While the ultimate outcome of these matters cannot be predicted with certainty, we believe that the resolution of any such proceedings will not have a material adverse effect on our financial condition, results of operations or cash flows.

For other matters, the Company is currently not able to estimate the reasonably possible loss or range of loss.

While the ultimate outcome of these matters cannot be predicted with certainty, the Company believes that the resolution of any such proceedings will not have a material adverse effect on the Company's financial condition, results of operations or cash flows.

KELLY SERVICES, INC.

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Segment Disclosures

The Company’s operating segments, which also represent its reporting segments, are based on the organizational structure for which financial results are regularly evaluated by the Company’s chief operating decision-maker ("CODM", the Company’s CEO) to determine resource allocation and assess performance.

The Company’s four reportable segments in 2024, (1) Professional & Industrial, (2) Science, Engineering & Technology, (3) Education, and (4) Outsourcing & Consulting, reflect the specialty services the Company provides to customers and represent how the business is organized internally.

Prior to 2024, the Company also had an International operating segment.

Beginning in the first quarter of 2024, the Company's organizational structure no longer includes the International segment following the sale of the EMEA staffing operations in January 2024.

Our Mexico operations, which were previously in our International segment, are now included in the Professional & Industrial segment.

Professional & Industrial segment information for the prior year has been recast to conform to the new structure.

The Company’s operating segments, which also represent its reportable segments, are based on the organizational structure for which financial results are regularly evaluated by the Company’s chief operating decision-maker (“CODM”, the Company’s CEO) to determine resource allocation and assess performance.

In the first quarter of 2025, the Company modified its reportable segments.

The Company’s three reportable segments:

(1) Enterprise Talent Management, (2) Science, Engineering & Technology, and (3) Education, reflect the specialty services the Company provides to customers and represent how the business is organized internally.

Intersegment revenue represents revenue earned between the reportable segments and is eliminated from total segment revenue from services.

In addition to the change in our segment structure in the first quarter of 2024, we reassessed the allocation of corporate expenses to the operating segments and allocated additional costs which are attributable to the business from corporate.

In the first quarter of 2024, the Company changed the primary segment profitability measure from earnings from operations to a business unit profit measure that excludes depreciation and amortization.

This change provides management greater visibility into the financial performance of the segments and how they contribute to the Company's overall performance.

Prior periods have been recast to reflect the current period allocation method and new segment profitability measurement.

The update had no impact on the consolidated financial information.

The following tables present information about the reported revenue from services and gross profit of the Company by reportable segment, along with a reconciliation to earnings before taxes, for the third quarter and September year-to-date 2024 and 2023.

The Company combined its former P&I and OCG segments into the ETM segment in the first quarter of 2025, responding to a shift in customer demand toward integrated workforce solutions and enabling a more streamlined and efficient go-to-market approach.

The Company also realigned certain customers from the SET segment to the ETM segment to support this integrated strategy.

Also in the first quarter of 2025, the Company moved MRP's Sevenstep business from the SET segment to the ETM segment as part of the broader integration of MRP.

The 2024 ETM and SET segment information has been recast to conform to the new structure.

The Company adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, in the fourth quarter of 2024 and included the relevant interim disclosures retrospectively for 2024.

The following tables present information about the reported revenue from services of the Company by reportable segment, along with a reconciliation to earnings before taxes, for the first quarter of 2025 and 2024.

Asset information by reportable segment is not presented since the Company does not produce such information internally nor does it use such information to manage its business.

Third Quarter September Year to Date

2024 2023 2024 2023

First Quarter 2025

(In millions of dollars)

ETM SET Education Inter-Segment Consolidated

Revenue from services $ 534.0 $ 322.4 $ 309.0 $ ( 0.5 ) $ 1,164.9

Professional & Industrial $ 370.4 $ 378.0 $ 1,086.5 $ 1,171.4

Science, Engineering & Technology 405.2 295.7 1,026.7 903.5

Education 142.1 128.1 683.1 583.9

Outsourcing & Consulting 121.0 114.1 346.0 342.4

International — 203.0 — 604.7

Intersegment revenue ( 0.6 ) ( 0.9 ) ( 1.6 ) ( 2.4 )

Consolidated Total $ 1,038.1 $ 1,118.0 $ 3,140.7 $ 3,603.5

Cost of services (1)

426.0 240.1 262.8 ( 0.5 ) 928.4

Direct salaries (2)

68.5 50.6 16.4

Other segment expenses (3)

32.7 18.3 10.5

SG&A expenses 101.2 68.9 26.9 — 197.0

Business unit profit (loss) $ 6.8 $ 13.4 $ 19.3 $ — $ 39.5

Corporate SG&A $ ( 15.9 )

Depreciation and amortization (4)

Consolidated earnings from operations 10.8

Other income (expense), net ( 3.2 )

Earnings before taxes $ 7.6

(1) Cost of services are those costs directly associated with the earning of revenue.

The primary examples of these types of costs are temporary employee wages, along with other employee related costs, including associated payroll taxes, temporary employee benefits, such as service bonus and holiday pay and health insurance, and workers’ compensation costs.

These costs differ fundamentally from SG&A expenses in that they arise specifically from the action of providing the Company's services to customers whereas SG&A costs are incurred regardless of whether or not the Company places temporary employees with its customers.

KELLY SERVICES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Third Quarter September Year to Date

2024 2023 2024 2023

(2) Direct salaries refers to the compensation expenses for employees directly related to the Company’s operations and service delivery.

These expenses include salaries, related payroll taxes, severance, various benefits and performance-based incentives and bonuses for these employees.

(3) For each reportable segment, the other segment expense category includes:

• ETM and EDU - Shared services costs for IT, human resources, legal and finance support, other professional services and overhead expenses, facilities and equipment-related costs, and operational software licenses.

• SET - Shared services costs for IT, human resources, legal and finance support, operational software licenses, other professional services and overhead expenses, and facilities and equipment-related costs.

(4) Represents total company depreciation and amortization of intangibles, including the amortization of hosted software.

First Quarter 2024

(In millions of dollars)

ETM SET Education Inter-Segment Consolidated

Revenue from services $ 524.1 $ 231.6 $ 289.9 $ ( 0.5 ) $ 1,045.1

Cost of services (1)

417.9 174.2 247.8 ( 0.5 ) 839.4

Direct salaries (2)

64.8 29.0 15.1

Other segment expenses (3)

33.3 14.2 8.9

SG&A expenses 98.1 43.2 24.0 — 165.3

Business unit profit (loss) $ 8.1 $ 14.2 $ 18.1 $ — $ 40.4

Professional & Industrial gross profit $ 66.5 $ 69.1 $ 192.7 $ 209.8

Professional & Industrial SG&A expenses excluding depreciation and amortization ( 56.3 ) ( 63.4 ) ( 169.7 ) ( 201.8 )

Professional & Industrial asset impairment charge — — — ( 0.3 )

Professional & Industrial Profit (Loss) 10.2 5.7 23.0 7.7

Science, Engineering & Technology gross profit 99.1 68.0 240.8 207.4

Science, Engineering & Technology SG&A expenses excluding depreciation and amortization ( 74.1 ) ( 47.3 ) ( 173.1 ) ( 150.2 )

Science, Engineering & Technology asset impairment charge — — — ( 0.1 )

Science, Engineering & Technology Profit (Loss) 25.0 20.7 67.7 57.1

Education gross profit 19.7 19.8 98.7 91.6

Education SG&A expenses excluding depreciation and amortization ( 23.0 ) ( 22.3 ) ( 71.2 ) ( 69.4 )

Education Profit (Loss) ( 3.3 ) ( 2.5 ) 27.5 22.2

Outsourcing & Consulting gross profit 36.4 41.5 108.9 124.4

Outsourcing & Consulting SG&A expenses excluding depreciation and amortization ( 34.1 ) ( 40.0 ) ( 105.4 ) ( 120.8 )

Outsourcing & Consulting asset impairment charge — — — ( 2.0 )

Outsourcing & Consulting Profit (Loss) 2.3 1.5 3.5 1.6

International gross profit — 30.1 — 90.0

International SG&A expenses excluding depreciation and amortization — ( 28.7 ) — ( 89.3 )

International Profit (Loss) — 1.4 — 0.7

Corporate ( 17.0 ) ( 16.7 ) ( 44.4 ) ( 42.6 )

Asset impairment charge — — ( 5.5 ) —

Corporate SG&A $ ( 15.0 )

Gain on sale of EMEA staffing operations 11.6

(Loss) gain on sale of assets ( 0.1 ) — 5.4 —

Depreciation and amortization (4)

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Earnings before taxes $ 29.8

(1) Cost of services are those costs directly associated with the earning of revenue.

(2) Direct salaries refers to the compensation expenses for employees directly related to the Company’s operations and service delivery.

These expenses include salaries, related payroll taxes, severance, various benefits and performance-based incentives and bonuses for these employees.

(3) For each reportable segment, the other segment expense category includes:

KELLY SERVICES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Depreciation and amortization expense is included in SG&A expenses in our consolidated statements of earnings.

Depreciation and amortization expense amounts below include amortization of implementation costs for hosted software, which are excluded in the presentation of depreciation and amortization in our consolidated statements of cash flows.

• ETM and SET - Shared services costs for IT, human resources, legal and finance support, other professional services and overhead expenses, facilities and equipment-related costs, and operational software licenses.

• EDU - Shared services costs for IT, human resources, legal and finance support, other professional services and overhead expenses, operational software licenses, and facilities and equipment-related costs.

(4) Represents total company depreciation and amortization of intangibles, including the amortization of hosted software.

Depreciation and amortization expense is included in SG&A expenses in the consolidated statements of earnings.

The depreciation and amortization amounts by segment are as follows:

Third Quarter September Year to Date

2024 2023 2024 2023

First Quarter

(In millions of dollars)

Depreciation and amortization:

Professional & Industrial $ 2.5 $ 2.0 $ 7.6 $ 5.9

Enterprise Talent Management $ 3.2 $ 4.2

Science, Engineering & Technology 7.5 4.0

Education 2.1 2.0

Outsourcing & Consulting 1.8 1.4 5.4 4.3

International — 0.6 — 1.8

New Accounting Pronouncements

Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Comprehensive income (Topic 220):

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The new guidance will be effective for annual periods beginning after December 15, 2026, with early adoption permitted.

We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.

In October 2023, the FASB issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative, which modifies several disclosure and presentation requirements in the FASB accounting standard codification to align them with the SEC regulations.

The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption permitted, by June 30, 2027.

For any amendments in which the SEC has not yet removed the applicable requirement from their regulations by June 30, 2027, the pending content of the related amendment in the FASB codification will not be effective.

We do not expect this update to have a material impact to our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires all public companies to provide more enhanced disclosures for significant segment expenses.

This ASU is effective for annual reporting periods beginning after December 15, 2023, including interim reporting periods within those annual periods, with early adoption permitted.

We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

1 unchanged sentence

This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.

Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures.

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

The Company does not expect this update to have a material impact to its consolidated financial statements.

Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on the Company's consolidated financial statements and related disclosures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements