What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-07 · 247 added, 209 removed, 609 unchanged (43% of the section changed)

3 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

(In millions of dollars except per share data)

(in millions, except per share data)

13 Weeks Ended 39 Weeks Ended

2025 June 30,

2024 June 29,

2025 June 30,

September 28,

2025 September 29,

2024 September 28,

2025 September 29,

Revenue from services $ 935.0 $ 1,038.1 $ 3,201.7 $ 3,140.7

2 unchanged sentences

Selling, general and administrative expenses 194.4 219.0 627.4 601.0

Goodwill impairment charge 102.0 — 102.0 —

Asset impairment charge — — — 5.5

(Gain) loss on sale of EMEA staffing operations ( 0.3 ) — ( 4.3 ) ( 1.6 )

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

Earnings from operations 22.2 12.2 33.0 39.0

(Gain) loss on sale of assets — 0.1 — ( 5.4 )

Earnings (loss) from operations ( 102.1 ) 2.6 ( 69.1 ) 41.6

Gain on forward contract — — — 1.2

Other income (expense), net ( 1.6 ) ( 4.4 ) ( 7.1 ) ( 9.1 )

Earnings before taxes 19.9 5.7 27.5 35.5

Income tax expense 0.9 1.1 2.7 5.1

Net earnings $ 19.0 $ 4.6 $ 24.8 $ 30.4

Basic earnings per share $ 0.52 $ 0.13 $ 0.68 $ 0.84

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

Earnings (loss) before taxes ( 103.7 ) ( 1.8 ) ( 76.2 ) 33.7

Income tax expense (benefit) 46.4 ( 2.6 ) 49.1 2.5

Net earnings (loss) $ ( 150.1 ) $ 0.8 $ ( 125.3 ) $ 31.2

Basic earnings (loss) per share $ ( 4.26 ) $ 0.02 $ ( 3.56 ) $ 0.86

Diluted earnings (loss) per share $ ( 4.26 ) $ 0.02 $ ( 3.56 ) $ 0.85

Average shares outstanding (millions):

5 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions of dollars)

(in millions)

13 Weeks Ended 39 Weeks Ended

2025 June 30,

2024 June 29,

2025 June 30,

Net earnings $ 19.0 $ 4.6 $ 24.8 $ 30.4

September 28,

2025 September 29,

2024 September 28,

2025 September 29,

Net earnings (loss) $ ( 150.1 ) $ 0.8 $ ( 125.3 ) $ 31.2

Other comprehensive income (loss), net of tax:

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 )

Foreign currency translation adjustments, net of tax benefits of $0.0 and $0.1, tax expense of $0.6 and tax benefit of $0.1, respectively ( 0.2 ) 1.2 6.1 ( 1.3 )

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

10 unchanged sentences

(in millions)

September 28,

2025 December 29, 2024

23 unchanged sentences

(in millions)

September 28,

2025 December 29, 2024

33 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions of dollars)

(in millions)

13 Weeks Ended 39 Weeks Ended

2025 June 30,

2024 June 29,

2025 June 30,

September 28,

2025 September 29,

2024 September 28,

2025 September 29,

Capital Stock

22 unchanged sentences

Balance at beginning of period 1,249.5 1,266.7 1,230.2 1,241.7

Net earnings 19.0 4.6 24.8 30.4

Net earnings (loss) ( 150.1 ) 0.8 ( 125.3 ) 31.2

Dividends ( 2.8 ) ( 2.8 ) ( 8.3 ) ( 8.2 )

9 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of dollars)

(in millions)

39 Weeks Ended

2025 June 30,

September 28,

2025 September 29,

Cash flows from operating activities:

Net earnings $ 24.8 $ 30.4

Net earnings (loss) $ ( 125.3 ) $ 31.2

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

Goodwill impairment charge 102.0 —

Asset impairment charge — 5.5

Deferred income taxes 41.3 12.8

Depreciation and amortization 32.0 28.7

18 unchanged sentences

Cash flows from financing activities:

Net change in short-term borrowings — 0.6

Proceeds from long-term debt 1,178.2 849.0

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CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(In millions of dollars)

(in millions)

(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:

39 Weeks Ended

2025 June 30,

September 28,

2025 September 29,

Reconciliation of cash, cash equivalents and restricted cash:

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The unaudited consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 29, 2024, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 13, 2025 (the 2024 consolidated financial statements).

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

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.

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

The Company’s third fiscal quarter ended on September 28, 2025 and September 29, 2024, each of which contained 13 weeks.

The corresponding September year-to-date periods for 2025 and 2024 each contained 39 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 made a change to its reportable segments during the first quarter of 2025.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Revenue Disaggregated by Service Type

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

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

Second Quarter 2025

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

Third Quarter 2025

Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total

5 unchanged sentences

Total Revenue from Services $ 935.0

Second Quarter 2024

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Third Quarter 2024

Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total

5 unchanged sentences

Total Revenue from Services $ 1,038.1

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June Year-to-Date 2025

September Year-to-Date 2025

Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total

5 unchanged sentences

Total Revenue from Services $ 3,201.7

June Year-to-Date 2024

September Year-to-Date 2024

Staffing Services Outcome-based Services Talent Solutions Permanent Placement Total

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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):

Second Quarter June Year-to-Date

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

Third Quarter September Year-to-Date

2025 2024 2025 2024

7 unchanged sentences

Deferred Costs

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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Amortization expense for the deferred costs in the third quarter and September year-to-date 2025 was $ 0.1 million and $ 1.9 million, respectively.

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.

Credit Losses

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):

June Year-to-Date

September Year-to-Date

Allowance for credit losses:

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Ending balance $ 7.7 $ 5.7

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

Write-offs are presented net of recoveries, which were not material for third 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.

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

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Acquisitions and Disposition

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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 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.

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

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The total consideration was as follows (in millions):

Cash consideration paid $ 425.0

Estimated cash acquired 13.6

Estimated net working capital adjustment 1.4

Cash acquired 13.6

Net working capital adjustment 1.4

Total cash consideration 440.0

2 unchanged sentences

Total consideration $ 444.8

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

11 unchanged sentences

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

In the third quarter of 2025, the Company reassessed the indemnification liability related to the sale (see Fair Value Measurements footnote) and recognized a $ 0.3 million (gain) loss 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.

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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 second 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 third 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.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of Second Quarter-End 2025

As of Third Quarter-End 2025

Description Total Level 1 Level 2 Level 3

(In millions of dollars)

(in millions)

Money market funds $ 4.7 $ 4.7 $ — $ —

4 unchanged sentences

Total liabilities at fair value $ ( 2.3 ) $ — $ ( 0.1 ) $ ( 2.2 )

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of Year-End 2024

Description Total Level 1 Level 2 Level 3

(In millions of dollars)

(in millions)

Money market funds $ 6.4 $ 6.4 $ — $ —

5 unchanged sentences

Money Market Funds

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.

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

therefore, it was marked-to-market and the changes in fair value were recognized in earnings.

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 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

4 unchanged sentences

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.

As of third 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 third quarter-end 2025.

Indemnification Liabilities

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.

As of third quarter-end 2025 and year-end 2024, the Company had an indemnification liability totaling $ 1.2 million and $ 2.0 million, respectively, relating to the sale of the EMEA staffing operations in January 2024, with the decrease attributable to exchange rate fluctuations.

In the third quarter of 2025, the indemnification liability was reassessed, and as a result of this reassessment, $ 0.3 million was recorded in (gain) loss on sale of EMEA staffing operations in the consolidated statements of earnings.

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.

4 unchanged sentences

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

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 of third quarter-end 2025, the Company has an indemnification liability totaling $ 1.0 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.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Earnout Liabilities

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

As of third quarter-end 2025, the value of the investment was $ 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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

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

Assets Measured at Fair Value on a Nonrecurring Basis

In addition to assets that are recorded at fair value on a recurring basis, annual and interim impairment tests may subject the Company’s reporting units with goodwill and long-lived assets to nonrecurring fair value measurement.

We perform an annual impairment test for goodwill in the fourth quarter of each year and for long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

During the third quarter of 2025, we concluded that there was a triggering event due to declines in the business performance related to the MRP and Softworld reporting units as a result of dynamic macroeconomic conditions and projected growth rates were revised accordingly.

As a result of the MRP and Softworld quantitative assessments, the Company determined that both MRP and Softworld’s estimated fair value of the reporting units no longer exceeded the carrying value.

The Company recorded goodwill impairment charges of $ 102.0 million.

These changes in circumstances were also indicators that the respective long-lived assets may not be recoverable.

The Company performed long-lived asset recoverability tests for MRP and Softworld and determined that undiscounted future cash flows exceeded the carrying amount of the asset groups and were recoverable.

The various inputs to the fair value models are considered level 3.

The Company engaged third-party valuation specialists and used industry-accepted valuation models and criteria that were reviewed and approved by various levels of management.

Refer to the Goodwill footnote for additional details on impairment charges related to the third quarter of 2025 as well as the valuation methodologies and inputs used to measure fair value.

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 $ 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 costs incurred related to these integration and realignment initiatives totaled $ 3.5 million and $ 20.3 million during the third quarter and September

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

year-to-date 2025, respectively.

For the third quarter 2025, integration and realignment costs consisted of $ 2.1 million of IT-related charges and $ 1.4 million of fees and other costs to execute the initiatives.

For September year-to-date 2025, integration and realignment costs consisted of $ 9.1 million of IT-related charges, $ 6.5 million of severance and $ 4.7 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 for the second quarter and June year-to-date 2025 (in millions of dollars):

Second Quarter 2025

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

Third Quarter 2025

IT-related Charges Severance Fees and Other Total

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Total $ 2.1 $ — $ 1.4 $ 3.5

June Year-to-Date 2025

September Year-to-Date 2025

IT-related Charges Severance Fees and Other Total

4 unchanged sentences

Total $ 9.1 $ 6.5 $ 4.7 $ 20.3

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

For September year-to-date 2024, the Company incurred $ 6.4 million of restructuring charges and transformation fees as a continuation of the comprehensive transformation initiative that was announced in the second quarter of 2023.

For September year-to-date 2024, transformation activities included $ 3.3 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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

September Year-to-Date 2024

Costs Transformation Costs Total

Enterprise Talent Management $ 0.9 $ — $ 0.9

2 unchanged sentences

Total $ 3.3 $ 3.1 $ 6.4

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.

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 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.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

SET Education ETM Total

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Balance as of year-end 2024 (1)

261.4 42.8 — 304.2

Adjustments — ( 0.1 ) — ( 0.1 )

Reallocation ( 22.3 ) — 22.3 —

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

Impairment adjustments ( 102.0 ) — — ( 102.0 )

Balance as of third quarter-end 2025 (1)

$ 137.1 $ 42.7 $ 22.3 $ 202.1

(1) Balances are net of accumulated impairment losses of $ 174.8 million and $ 72.8 million as of third quarter-end of 2025 and year-end 2024, respectively.

During the first quarter of 2025, the Company changed its reportable segments, 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 (see Segment Disclosures footnote).

The Company tested goodwill for impairment before and after the change in reportable segments and determined no adjustments to goodwill were required as a result of the change.

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 Acquisitions and Disposition footnote).

During the third quarter of 2025, the Company assessed the continued integration of the MRP and Softworld reporting units, noting that the discrete financial data regularly reviewed by management had changed.

As such, the Company combined the MRP and Softworld reporting units with the other legacy SET operations into one SET reporting unit.

During the assessment, but before the combination, we concluded that there was a triggering event due to declines in the business performance and revised projected growth rates as a result of dynamic macroeconomic conditions.

Therefore, it was necessary to perform step one quantitative tests for both the MRP and Softworld reporting units that comprised the total goodwill balance in the SET reportable segment.

The Company recorded an impairment charge of $ 63.5 million and $ 38.5 million for MRP and Softworld, respectively, for a total goodwill impairment charge of $ 102.0 million, which was included in goodwill impairment charge in the consolidated statements of earnings at third quarter-end 2025.

Included in the impairment charges were $ 8.6 million and $ 9.8 million of tax benefits for MRP and Softworld, respectively, associated with the impairment.

In performing the step one quantitative tests and consistent with the Company’s prior practice, we determined the fair value of the MRP and Softworld reporting units using the income approach.

Under the income approach, estimated fair value is determined based on estimated future cash flows discounted by an estimated market participant weighted-average cost of capital, which reflects the overall level of inherent risk of the reporting unit being measured.

Estimated future cash flows are based on the Company’s internal projection model and reflects management’s outlook for the reporting unit.

Assumptions and estimates about future cash flows and discount rates are complex and often subjective.

The analysis used the following significant assumptions:

expected future revenue growth rates, profit margins and discount rate.

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

These changes in circumstances were also indicators that the respective long-lived assets may not be recoverable.

MRP and Softworld have definite-lived intangible assets, consisting of trade names, customer relationships and non-compete agreements, which are amortized over their estimated useful lives.

As of the third quarter 2025, following the interim triggering event and post-combination of MRP and Softworld reporting units with the legacy SET operations, the Company performed a step one quantitative test for the combined SET reporting unit and noted no goodwill adjustments were needed as the estimated fair value of the SET reporting unit exceeded the carrying value with a headroom greater than 10 %.

Revolving Credit Facility

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trade accounts receivable.

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.

At the end of the third quarter of 2025, there were no long-term borrowings under the Facility and a remaining borrowing capacity of $ 150.0 million.

The rates for the Facility, which vary based on the Company's leverage ratio as defined in the agreement, include 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.

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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 second 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 second quarter of 2025:

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 15.0 basis points at the end of the third quarter of 2025 and 20.0 basis points at year-end 2024.

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

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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 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.

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

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

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

and January 17, 2026, respectively.

At the end of the third quarter of 2025, the Securitization Facility had $ 118.4 million of long-term borrowings, SBLCs of $ 42.6 million related to workers’ compensation and a remaining borrowing capacity of $ 89.0 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, 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 borrowing capacity of $ 4.5 million.

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).

At the end of the third 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 $ 3.2 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.

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

The Company had no borrowings under these lines at the end of the third quarter of 2025 and at year-end 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 2025 and 2024 are included in the table below (in millions).

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Accumulated Other Comprehensive Income (Loss)

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

Third Quarter September Year-to-Date

2025 2024 2025 2024

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Beginning balance — — — ( 0.4 )

Other comprehensive income (loss) before reclassifications — — — —

Amounts reclassified from accumulated other comprehensive income (loss) — — — 0.4

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Earnings Per Share

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

Earnings (Loss) Per Share

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

Third Quarter September Year-to-Date

2025 2024 2025 2024

Net earnings $ 19.0 $ 4.6 $ 24.8 $ 30.4

Net earnings (loss) $ ( 150.1 ) $ 0.8 $ ( 125.3 ) $ 31.2

earnings allocated to participating securities — ( 0.1 ) — ( 0.8 )

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Diluted 35.3 36.0 35.2 35.9

Basic earnings per share $ 0.52 $ 0.13 $ 0.68 $ 0.84

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

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 .

Basic earnings (loss) per share $ ( 4.26 ) $ 0.02 $ ( 3.56 ) $ 0.86

Diluted earnings (loss) per share $ ( 4.26 ) $ 0.02 $ ( 3.56 ) $ 0.85

Due to the Company’s net loss in the third quarter and September year-to-date 2025, potentially dilutive share awards outstanding, primarily related to non-employee directors deferred compensation plan and performance shares (see Stock-Based Compensation footnote for a description of performance shares) of 0.4 million and 0.5 million shares for the third quarter and September year-to-date 2025, respectively, had an anti-dilutive effect on diluted earnings per share and were excluded from the computation.

Potentially dilutive share awards for Class A common shares 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.

Dividends paid per share for Class A and Class B common stock were $ 0.075 for the third quarter of 2025 and 2024 and $ 0.225 for September 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 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.

During the third quarter and September year-to-date 2025, the Company did not repurchase any Class A shares.

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

Stock-Based Compensation

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.

For the third quarter of 2025, the Company recognized stock compensation expense of $ 2.6 million and a related tax benefit of $ 0.4 million.

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 September year-to-date 2025, the Company recognized stock compensation expense of $ 9.8 million and a related tax benefit of $ 1.3 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.

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 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.

KELLY SERVICES, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

A summary of the status of all nonvested performance shares at target as of third quarter-end 2025 and the year-to-date changes is presented as follows below (in thousands of shares except per share data).

Performance Shares

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Vesting adjustment ( 28 ) 15.48

Nonvested at second quarter-end 2025 669 $ 14.98

Nonvested at third quarter-end 2025 635 $ 14.97

Restricted Stock

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).

A summary of the status of nonvested restricted stock as of third 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 ( 137 ) 17.35

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

Nonvested at third quarter-end 2025 1,523 $ 16.11

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.

On June 10, 2024, the Company sold Ayers Group, a division of the 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.

As of the date of the sale, the net carrying value of the assets was a credit balance of $ 1.0 million.

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

A gain of $ 5.4 million was recorded in (gain) loss 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.

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Other Income (Expense), Net

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

Second Quarter June Year-to-Date

Included in other income (expense), net are the following (in millions):

Third Quarter September Year-to-Date

2025 2024 2025 2024

(In millions of dollars)

Interest income $ 1.0 $ 1.3 $ 2.7 $ 6.4

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Other income (expense), net $ ( 1.6 ) $ ( 4.4 ) $ ( 7.1 ) $ ( 9.1 )

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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

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

Income tax expense was $ 46.4 million and income tax benefit was $ 2.6 million for the third quarter of 2025 and 2024, respectively.

Income tax expense was $ 49.1 million and $ 2.5 million for September year-to-date 2025 and 2024, respectively.

The quarterly and year-to-date variances were driven by the valuation allowance and goodwill impairment charges.

The Company's interim tax provision is calculated using the estimated annual effective tax rate applied to year-to-date income, adjusted for 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.

It is also affected by discrete items that may occur in any given period but are not consistent from period to period, such as tax law changes, changes in judgment regarding the realizability of deferred tax assets and the tax effects of stock compensation.

It is also adjusted for discrete items that may occur in any given period but are not consistent from period to period, such as tax law changes, changes in judgment regarding the realizability of deferred tax assets and the tax effects of stock compensation.

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.

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.

In the third quarter of 2025, the Company recorded a net charge of $ 69.7 million to establish a valuation allowance against a portion of its work opportunity credit carryforwards.

This allowance was established principally due to cumulative losses in recent years, which were driven by goodwill impairment charges.

Cumulative losses are a significant piece of negative evidence that limits the ability to consider other evidence, such as projections for future growth.

The Company will continue to evaluate the need for the valuation allowances against deferred tax assets on a quarterly basis and may adjust the allowance as circumstances change.

The work opportunity credit program is a temporary provision in the U.S.

tax law and expires for employees hired after 2025.

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

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

The OBBBA did not have any material impact on the Company’s consolidated financial statements and related disclosures.

KELLY SERVICES, INC.

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

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.

At third quarter-end 2025 and year-end 2024, the gross accrual for litigation costs amounted to $ 2.5 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 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.

At third 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 zero to $ 1.7 million as of third 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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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 second quarter and June year-to-date 2025 and 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 third quarter and September year-to-date 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Second Quarter 2025

(In millions of dollars)

Third Quarter 2025

(in millions)

ETM SET Education Inter-Segment Consolidated

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SG&A expenses 87.6 57.6 24.5 — 169.7

Goodwill impairment charge — 102.0 —

Business unit profit (loss) $ 9.1 $ ( 82.4 ) $ ( 4.4 ) $ — $ ( 77.7 )

2 unchanged sentences

Depreciation and amortization (4)

Consolidated earnings from operations 22.2

Consolidated earnings (loss) from operations ( 102.1 )

Other income (expense), net ( 1.6 )

Earnings before taxes $ 19.9

June Year-to-Date 2025

(In millions of dollars)

Earnings (loss) before taxes $ ( 103.7 )

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

September Year-to-Date 2025

(in millions)

ETM SET Education Inter-Segment Consolidated

7 unchanged sentences

SG&A expenses 281.7 189.6 76.9 — 548.2

Goodwill impairment charge — 102.0 —

Business unit profit (loss) $ 27.0 $ ( 49.7 ) $ 28.5 $ — $ 5.8

2 unchanged sentences

Depreciation and amortization (4)

Consolidated earnings from operations 33.0

Consolidated earnings (loss) from operations ( 69.1 )

Other income (expense), net ( 7.1 )

Earnings before taxes $ 27.5

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Earnings (loss) before taxes $ ( 76.2 )

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

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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 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.

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

• ETM and Education - 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, 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.

Second Quarter 2024

(In millions of dollars)

KELLY SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Third Quarter 2024

(in millions)

ETM SET Education Inter-Segment Consolidated

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Corporate SG&A $ ( 17.0 )

Loss on sale of EMEA staffing operations ( 10.0 )

Asset impairment charge ( 5.5 )

Gain on sale of assets ( 0.1 )

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Other income (expense), net ( 4.4 )

Earnings before taxes $ 5.7

Earnings (loss) before taxes $ ( 1.8 )

KELLY SERVICES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June Year-to-Date 2024

(In millions of dollars)

September Year-to-Date 2024

(in millions)

ETM SET Education Inter-Segment Consolidated

22 unchanged sentences

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

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

(3) For both third quarter and September 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.

6 unchanged sentences

The depreciation and amortization amounts by segment are as follows:

Second Quarter June Year-to-Date

Third Quarter September Year-to-Date

2025 2024 2025 2024

(In millions of dollars)

(in millions)

Depreciation and amortization:

4 unchanged sentences

Recently Issued Accounting Pronouncements Not Yet Adopted

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40).

This ASU simplifies and modernizes guidance for internal-use software by clarifying capitalization thresholds, improving comparability and reducing judgment diversity across all software development methodologies.

This ASU is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted.

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

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

This ASU allows for a practical expedient to be used when estimating expected credit losses on current accounts receivable and/or current contract assets arising from transactions under Topic 606.

The new guidance will be effective for annual periods beginning after December 15, 2025, with early adoption permitted.

This ASU applies to trade accounts receivable and may have an impact on the calculation of the allowance for uncollectible accounts receivable.

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

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

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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