What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 250 added, 137 removed, 568 unchanged (41% of the section changed)

4 unchanged sentences

(In millions of dollars except per share data)

13 Weeks Ended

2025 March 31,

13 Weeks Ended 26 Weeks Ended

2025 June 30,

2024 June 29,

2025 June 30,

Revenue from services $ 1,101.8 $ 1,057.5 $ 2,266.7 $ 2,102.6

2 unchanged sentences

Selling, general and administrative expenses 207.3 191.5 433.0 382.0

Gain on sale of EMEA staffing operations — ( 11.6 )

Asset impairment charge — 5.5 — 5.5

(Gain) loss on sale of EMEA staffing operations ( 4.0 ) 10.0 ( 4.0 ) ( 1.6 )

Gain on sale of assets — ( 5.5 ) — ( 5.5 )

Earnings from operations 22.2 12.2 33.0 39.0

14 unchanged sentences

(In millions of dollars)

13 Weeks Ended

2025 March 31,

13 Weeks Ended 26 Weeks Ended

2025 June 30,

2024 June 29,

2025 June 30,

Net earnings $ 19.0 $ 4.6 $ 24.8 $ 30.4

Other comprehensive income (loss), net of tax:

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

Foreign currency translation adjustments, net of tax expense of $0.6, $0.0, $0.6 and $0.0, respectively 5.0 ( 2.0 ) 6.3 ( 2.5 )

Reclassification adjustments included in net earnings — — — ( 0.6 )

14 unchanged sentences

Trade accounts receivable, less allowances of $ 10.8 and $ 8.4 , respectively

1,181.1 1,255.5

Prepaid expenses and other current assets 54.0 71.0

54 unchanged sentences

(In millions of dollars)

13 Weeks Ended

2025 March 31,

13 Weeks Ended 26 Weeks Ended

2025 June 30,

2024 June 29,

2025 June 30,

Capital Stock

36 unchanged sentences

26 Weeks Ended

2025 March 31,

2025 June 30,

Cash flows from operating activities:

1 unchanged sentence

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

Asset impairment charge — 5.5

Depreciation and amortization 21.5 17.6

3 unchanged sentences

Gain on sale of EMEA staffing operations ( 4.0 ) ( 1.6 )

Gain on sale of assets — ( 5.5 )

Gain on forward contract — ( 1.2 )

1 unchanged sentence

Changes in operating assets and liabilities, net of acquisition 61.3 ( 21.5 )

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

Net cash from operating activities 119.3 32.2

Cash flows from investing activities:

Capital expenditures ( 4.5 ) ( 6.7 )

Proceeds from sale of PersolKelly investment 6.4 —

Proceeds from sale of EMEA staffing operations, net of cash disposed 21.8 77.1

Proceeds from sale of PersolKelly investment 6.4 —

Proceeds from sale of assets — 4.4

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

Payment for settlement of forward contract — ( 2.4 )

Other investing activities 1.0 1.9

Net cash from investing activities 3.2 72.1

Net cash from (used in) investing activities 24.7 ( 353.1 )

Cash flows from financing activities:

4 unchanged sentences

Other financing activities ( 0.2 ) ( 1.3 )

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

Net cash (used in) from financing activities ( 172.7 ) 201.6

Effect of exchange rates on cash, cash equivalents and restricted cash 7.6 ( 2.7 )

9 unchanged sentences

26 Weeks Ended

2025 March 31,

2025 June 30,

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

The Company’s second fiscal quarter ended on June 29, 2025 and June 30, 2024, each of which contained 13 weeks.

The corresponding June year-to-date periods for 2025 and 2024 each contained 26 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 Revenue and Segment Disclosures footnotes, the Company has made a change to its reportable segments during the first quarter of 2025.

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

KELLY SERVICES, INC.

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Revenue Disaggregated by Service Type

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

In 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.

In the first quarter of 2025, the Company also integrated the Sevenstep business—acquired as part of the Motion Recruitment Partners, LLC (“MRP”) acquisition and which had previously been included in the SET segment—into the ETM segment as part of the broader MRP integration strategy.

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

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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

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

Second Quarter 2025

Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total

Enterprise Talent Management $ 269.6 $ 120.8 $ 126.9 $ 2.9 $ 520.2

Staffing services $ 280.7 $ 285.9

Permanent placement 2.3 2.7

Outcome-based services 133.2 130.8

Talent solutions 117.8 104.7

Total Enterprise Talent Management 534.0 524.1

Science, Engineering & Technology 200.7 107.3 — 9.3 317.3

Staffing services 204.9 140.0

Permanent placement 8.1 4.2

Outcome-based services 109.4 87.4

Total Science, Engineering & Technology 322.4 231.6

Staffing services 307.9 288.8

Permanent placement 1.1 1.1

Total Education 309.0 289.9

Total Intersegment ( 0.5 ) ( 0.5 )

Education 262.7 — — 2.6 265.3

Total Segment Revenue $ 733.0 $ 228.1 $ 126.9 $ 14.8 $ 1,102.8

Intersegment ( 1.0 )

Total Revenue from Services $ 1,101.8

Second Quarter 2024

Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total

Enterprise Talent Management $ 292.2 $ 128.8 $ 117.9 $ 2.3 $ 541.2

Science, Engineering & Technology 164.7 95.2 — 5.8 265.7

Education 248.5 — — 2.6 251.1

Total Segment Revenue $ 705.4 $ 224.0 $ 117.9 $ 10.7 $ 1,058.0

Intersegment ( 0.5 )

Total Revenue from Services $ 1,057.5

KELLY SERVICES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June Year-to-Date 2025

Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total

Enterprise Talent Management $ 550.3 $ 254.0 $ 244.7 $ 5.2 $ 1,054.2

Science, Engineering & Technology 405.6 216.7 — 17.4 639.7

Education 570.6 — — 3.7 574.3

Total Segment Revenue $ 1,526.5 $ 470.7 $ 244.7 $ 26.3 $ 2,268.2

Intersegment ( 1.5 )

Total Revenue from Services $ 2,266.7

June Year-to-Date 2024

Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total

Enterprise Talent Management $ 578.1 $ 259.6 $ 222.6 $ 5.0 $ 1,065.3

Science, Engineering & Technology 304.7 182.6 — 10.0 497.3

Education 537.3 — — 3.7 541.0

Total Segment Revenue $ 1,420.1 $ 442.2 $ 222.6 $ 18.7 $ 2,103.6

Intersegment ( 1.0 )

Total Revenue from Services $ 2,102.6

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Revenue Disaggregated by Geography

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

First Quarter

Second Quarter June Year-to-Date

2025 2024 2025 2024

United States $ 986.9 $ 944.2 $ 2,043.5 $ 1,877.8

5 unchanged sentences

$ 1,101.8 $ 1,057.5 $ 2,266.7 $ 2,102.6

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

Europe 7.7 7.7

Asia-Pacific 15.4 11.5

Total Enterprise Talent Management $ 534.0 $ 524.1

Science, Engineering & Technology

Americas $ 320.5 $ 228.5

Europe 1.9 3.1

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 $ 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.

Deferred fulfillment costs, which are included in prepaid expenses and other current assets in the consolidated balance sheet, were $ 0.1 million as of second quarter-end 2025 and $ 1.8 million as of year-end 2024.

Amortization expense for the deferred costs in the second quarter and June year-to-date 2025 was $ 0.6 million and $ 1.8 million, respectively.

Amortization expense for the deferred costs in the second quarter and June year-to-date 2024 was $ 1.7 million and $ 4.1 million, respectively.

KELLY SERVICES, INC.

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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

June Year-to-Date

Allowance for credit losses:

5 unchanged sentences

Ending balance $ 7.4 $ 5.2

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.

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

As of second quarter-end 2024, the Company had a receivable of $ 16.8 million related to the sale of the EMEA staffing operations (see Acquisitions and Disposition footnote).

The Company determined that no credit loss provision was required on this receivable as it was considered collectible;

it was subsequently settled in the second quarter of 2025.

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

Acquisitions and Disposition

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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 earnout period concluded in the first quarter of 2025 and no further liability will be recognized (see Fair Value Measurements footnote).

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

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Total consideration $ 444.8

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

As of May 2025, the purchase price allocation for this acquisition is final.

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 ETM and SET segments.

MRP's results of operations are included in the ETM and SET segments, with MRP’s Sevenstep business included in ETM and the remaining operations in SET.

Disposition of EMEA Staffing Operations

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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 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.

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.

In the first quarter of 2024, the Company recorded a euro-denominated receivable from Gi of $ 26.9 million, representing working capital and other adjustments that were determinable and expected to be received under the cash-free, debt-free transaction structure.

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 and was recognized in (gain) loss on sale of EMEA staffing operations in the consolidated statements of earnings.

In the second quarter of 2025, the Company received proceeds of $ 21.8 million in connection with this receivable.

The proceeds exceeded the amount previously recorded due to favorable resolution of certain reconciliations under the terms of the purchase agreement.

As a result, $ 4.8 million was recognized in the consolidated statements of earnings in the second quarter of 2025, with $ 4.0 million recorded in (gain) loss on sale of EMEA staffing operations and $ 0.8 million recorded in other income (expense), net reflecting foreign currency remeasurements up to the date of settlement.

The proceeds are included in investing activities in the consolidated statements of cash flows.

The receivable from Gi was fully settled and there is no remaining receivable as of the second quarter-end 2025.

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.

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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 first quarter-end 2025 and year-end 2024 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 second 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of First Quarter-End 2025

As of Second Quarter-End 2025

Description Total Level 1 Level 2 Level 3

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Money Market Funds

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.

Money market funds represent investments in money market funds that hold government securities, all of which are restricted as of second 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.

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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 are remeasured quarterly.

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.

The 12-month interest rate swap was settled in the second quarter of 2025 (see Debt footnote).

As of second quarter-end 2025 and year-end 2024, the Company recorded a liability totaling $ 0.1 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 as of the second quarter-end 2025.

Indemnification Liabilities

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.

As of second quarter-end 2025 and year-end 2024, the Company had an indemnification liability totaling $ 2.2 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.

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 of second 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.

2 unchanged sentences

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

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

3 unchanged sentences

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.

The earnout period concluded in the first quarter of 2025 and no further liability will be recognized.

Equity Investment Without Readily Determinable Fair Value

3 unchanged sentences

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.

As of second 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.

5 unchanged sentences

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.

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

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 costs incurred related to these integration and realignment initiatives totaled $ 6.1 million and $ 16.8 million during the second quarter and June year-to-date 2025, respectively.

For the second quarter 2025, integration and realignment costs consisted of $ 1.7 million of IT-related charges, $ 2.1 million of severance and $ 2.3 million of fees and other costs to execute the initiatives.

For June year-to-date 2025, integration and realignment costs consisted of $ 7.0 million of IT-related charges, $ 6.5 million of severance and $ 3.3 million of fees and other costs to execute the initiatives.

The severance costs incurred as a part of these efforts are primarily 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

The integration and realignment costs included in SG&A are detailed below for the second quarter and June year-to-date 2025 (in millions of dollars):

Second Quarter 2025

IT-related Charges Severance Fees and Other Total

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Science, Engineering & Technology 0.1 0.9 — 1.0

Education — 0.1 — 0.1

Corporate 1.6 0.1 2.2 3.9

Total $ 1.7 $ 2.1 $ 2.3 $ 6.1

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

June Year-to-Date 2025

IT-related Charges Severance Fees and Other Total

Enterprise Talent Management $ — $ 3.7 $ 0.1 $ 3.8

Science, Engineering & Technology 0.1 2.0 — 2.1

Education — 0.1 — 0.1

Corporate 6.9 0.7 3.2 10.8

Total $ 7.0 $ 6.5 $ 3.3 $ 16.8

In the second quarter and June year-to-date 2024, the Company incurred $ 4.3 million and $ 6.6 million, respectively, of restructuring charges and transformation fees as a continuation of the comprehensive transformation initiative that was announced in the second quarter of 2023.

For the second quarter of 2024, transformation activities included $ 2.4 million of severance and $ 1.9 million of costs to execute the transformation through the use of an external consultant.

For June year-to-date 2024, transformation activities included $ 3.5 million of severance and $ 3.1 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.

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

Second Quarter 2024 June Year-to-Date 2024

Costs Lease Termination Costs,

Transformation

and Other Total Severance

Costs Lease Termination Costs,

Transformation

and Other Total

Enterprise Talent Management $ 0.3 $ — $ 0.3 $ 1.0 $ — $ 1.0

Science, Engineering & Technology 0.3 — 0.3 0.3 — 0.3

Corporate 1.8 1.9 3.7 2.2 3.1 5.3

Total $ 2.4 $ 1.9 $ 4.3 $ 3.5 $ 3.1 $ 6.6

The changes in the carrying amount of goodwill through second 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.

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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

SET Education ETM Total

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

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Reallocation ( 22.3 ) — 22.3 —

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

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

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Revolving Credit Facility

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trade accounts receivable.

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.

At the end of the second quarter of 2025, there were $ 20.0 million of long-term borrowings on the term benchmark line under the Facility and a remaining borrowing capacity of $ 130.0 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.

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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 Facility’s financial covenants and restrictions are described below, all of which were met at the end of the second 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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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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.

At the end of the second quarter of 2025, the Securitization Facility had $ 54.3 million of long-term borrowings, SBLCs of $ 42.6 million related to workers’ compensation and a remaining capacity of $ 153.1 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.

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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).

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

and January 17, 2026, respectively.

The 12-month interest rate swap was settled early with the final payment made in June 2025.

At the end of the second quarter of 2025 and at year-end 2024, the Company recorded a liability totaling $ 0.1 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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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.

The Company had total unsecured, uncommitted short-term local credit facilities of $ 3.2 million at the end of the second quarter of 2025.

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

KELLY SERVICES, INC.

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Accumulated Other Comprehensive Income (Loss)

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

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

Second Quarter June Year-to-Date

2025 2024 2025 2024

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 first quarter of 2025 and 2024 is as follows (in millions of dollars except per share data):

First Quarter

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

Second Quarter June Year-to-Date

2025 2024 2025 2024

Net earnings $ 19.0 $ 4.6 $ 24.8 $ 30.4

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Diluted earnings per share $ 0.52 $ 0.12 $ 0.67 $ 0.83

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.

Potentially dilutive share awards for Class A common stock are related to deferred common stock related to the non-employee directors deferred compensation plan and performance shares for the second quarter and June year-to-date 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 second quarter of 2025 and 2024 and $ 0.15 for June year-to-date 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.

During the second quarter and June year-to-date 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 second quarter-end 2025.

Stock-Based Compensation

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.

For the second quarter of 2025, the Company recognized stock compensation expense of $ 3.5 million and a related tax benefit of $ 0.6 million.

For the second quarter of 2024, the Company recognized stock compensation expense of $ 2.4 million and a related tax benefit of $ 0.6 million.

For June year-to-date 2025, the Company recognized stock compensation expense of $ 7.2 million and a related tax benefit of $ 0.9 million.

For June year-to-date 2024, the Company recognized stock compensation expense of $ 5.2 million and a related tax benefit of $ 1.3 million.

Performance Shares

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No dividends are paid on these performance shares.

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).

A summary of the status of all nonvested performance shares at target as of second quarter-end 2025 and the year-to-date changes 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.

9 unchanged sentences

Vesting adjustment ( 28 ) 15.48

Nonvested at first quarter-end 2025 669 $ 14.98

Nonvested at second quarter-end 2025 669 $ 14.98

Restricted Stock

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).

A summary of the status of nonvested restricted stock as of second quarter-end 2025 and the year-to-date changes is presented as follows below (in thousands of shares except per share data).

Restricted Stock

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Forfeited ( 85 ) 17.69

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

Nonvested at second quarter-end 2025 1,262 $ 16.83

Sale of Assets

On June 10, 2024, the Company sold Ayers Group, a division of our ETM 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, representing the purchase price less the value of rights to certain receivables and deferred revenue retained by the Company, net of working capital adjustments in accordance with the agreement.

As of the date of the sale, the net carrying value of the assets was a credit balance of $ 1.0 million, resulting in a gain on the sale of $ 5.5 million which was recorded in gain on sale of assets in the consolidated statements of earnings.

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

Other Income (Expense), Net

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

First Quarter

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

Second Quarter June Year-to-Date

2025 2024 2025 2024

(In millions of dollars)

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Other income (expense), net $ ( 2.3 ) $ ( 6.5 ) $ ( 5.5 ) $ ( 4.7 )

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

KELLY SERVICES, INC.

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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.

Income tax expense was $ 0.9 million for the second quarter of 2025 and $ 1.1 million for the second quarter of 2024.

Income tax expense was $ 2.7 million for June year-to-date 2025 and $ 5.1 million for June year-to-date 2024.

The quarterly variance was driven by changes in pretax income, changes in the valuation allowance on the tax benefit from the EMEA staffing operations sale, and 2024 non-deductible acquisition costs.

The year-to-date variance was driven by changes in pretax income and 2024 non-deductible acquisition costs.

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

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The Company provides valuation allowances against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

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

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

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing multiple changes to the U.S.

The Company is currently evaluating the OBBBA and does not expect any material impacts on its consolidated financial statements and related disclosures.

The work opportunity credit program generates a significant tax benefit for the Company.

It is a temporary provision in the U.S.

tax law and expires for employees hired after 2025.

While the work opportunity credit has routinely been extended, it is uncertain whether it will again be extended.

In the event the program is not renewed, we will continue to receive credits for qualified employees hired prior to 2026.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Contingencies

2 unchanged sentences

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

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.

At second quarter-end 2025 and year-end 2024, the gross accrual for litigation costs amounted to $ 1.8 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 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.

At second 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 $ 0.1 million to $ 2.3 million as of second 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.

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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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Segment Disclosures

10 unchanged sentences

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.

First Quarter 2025

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Second Quarter 2025

(In millions of dollars)

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Corporate SG&A $ ( 13.3 )

Gain on sale of EMEA staffing operations 4.0

Depreciation and amortization (4)

2 unchanged sentences

Earnings before taxes $ 19.9

(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.

June Year-to-Date 2025

(In millions of dollars)

ETM SET Education Inter-Segment Consolidated

Revenue from services $ 1,054.2 $ 639.7 $ 574.3 $ ( 1.5 ) $ 2,266.7

Cost of services (1)

842.2 475.0 489.0 ( 1.5 ) 1,804.7

Direct salaries (2)

129.8 97.1 31.5

Other segment expenses (3)

64.3 34.9 20.9

SG&A expenses 194.1 132.0 52.4 — 378.5

Business unit profit (loss) $ 17.9 $ 32.7 $ 32.9 $ — $ 83.5

Corporate SG&A $ ( 29.2 )

Gain on sale of EMEA staffing operations 4.0

Depreciation and amortization (4)

Consolidated earnings from operations 33.0

Other income (expense), net ( 5.5 )

Earnings before taxes $ 27.5

KELLY SERVICES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(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:

(3) For both second quarter and June year-to-date 2025, other segment expenses for each reportable segment included:

• 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.

• SET - 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.

First Quarter 2024

Second Quarter 2024

(In millions of dollars)

10 unchanged sentences

Corporate SG&A $ ( 12.4 )

Loss on sale of EMEA staffing operations ( 10.0 )

Asset impairment charge ( 5.5 )

Gain on sale of assets 5.5

Depreciation and amortization (4)

Consolidated earnings from operations 12.2

Gain on forward contract —

Other income (expense), net ( 6.5 )

Earnings before taxes $ 5.7

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June Year-to-Date 2024

(In millions of dollars)

ETM SET Education Inter-Segment Consolidated

Revenue from services $ 1,065.3 $ 497.3 $ 541.0 $ ( 1.0 ) $ 2,102.6

Cost of services (1)

850.1 372.1 462.0 ( 1.0 ) 1,683.2

Direct salaries (2)

127.5 65.0 30.7

Other segment expenses (3)

64.1 27.1 17.5

SG&A expenses 191.6 92.1 48.2 — 331.9

Business unit profit (loss) $ 23.6 $ 33.1 $ 30.8 $ — $ 87.5

Corporate SG&A $ ( 27.4 )

Gain on sale of EMEA staffing operations 1.6

Asset impairment charge ( 5.5 )

Gain on sale of assets 5.5

Depreciation and amortization (4)

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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:

(3) For both second quarter and June year-to-date 2024, other segment expenses for each reportable segment included:

• 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.

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

KELLY SERVICES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

• 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.

1 unchanged sentence

The depreciation and amortization amounts by segment are as follows:

First Quarter

Second Quarter June Year-to-Date

2025 2024 2025 2024

(In millions of dollars)

21 unchanged sentences

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