What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-06 · 98 added, 174 removed, 92 unchanged (75% of the section changed)

1 unchanged sentence

Executive Overview

In the third quarter, Kelly continued to capture growth in more resilient markets.

The Education segment delivered revenue growth driven by continued demand in the K-12 staffing and pediatric therapy specialties.

In SET, demand for engineering and telecom workforce solutions remained robust driven by investments in large capital projects such as data centers.

Payroll process outsourcing continued to be a source of strength within the ETM segment’s talent solutions offerings and delivered revenue growth over the prior year.

Kelly’s results also reflect reduced volumes in parts of our portfolio driven by lower demand among certain large customers and a more measured approach to hiring among employers in some sectors, primarily in response to the dynamic macroeconomic environment.

Results in ETM continued to be impacted by demand reductions among three large customers, which Kelly disclosed in the second quarter.

Staffing volumes in ETM and SET associated with the U.S.

federal government, which were materially reduced beginning in the first quarter of 2025 as a result of government efficiency actions, continued to trend lower in the third quarter.

Throughout the third quarter, Kelly maintained its commitment to aligning resources with demand and took a disciplined approach to expense management to address these dynamics.

As Kelly navigated a dynamic environment in the third quarter, the Company remained focused on positioning itself for the future.

Kelly continued to refine its go-to-market strategy with large enterprise customers and within SET, enhancing service delivery to improve the customer experience.

The Company also made further progress toward modernizing its front- and back-office systems within SET, leveraging MRP’s leading technology stack to consolidate disparate platforms, reduce complexity, and drive efficiency.

Kelly’s ability to capture growth in more resilient markets in the third quarter reflects the Company’s diversified portfolio of specialty businesses, each with industry leading positions and differentiated offerings.

As the demand environment continues to evolve, the Company will remain agile in pursuit of profitable growth and committed to long-term value creation.

In the first quarter, we achieved results that were in line with our expectations, reflecting our ongoing focus on stabilizing the business.

In ETM, revenue trends improved sequentially from the fourth quarter, driven by growth in Talent Solutions across the MSP, RPO, and PPO offerings.

In SET, we delivered another quarter of year-over-year growth in our Telecom specialty, and Science & Clinical improved sequentially.

In Education, we continued to experience pressure from delayed contract decisions, enrollment declines, and elevated weather-related school closures.

Our results continue to reflect reduced volumes in parts of our portfolio driven by lower demand among certain large customers and a more measured approach to hiring among employers in some sectors, primarily in response to the dynamic macroeconomic environment.

The impact of demand reductions among three large customers, which we disclosed in the second quarter of 2025, remains visible in the results of ETM.

Staffing volumes in SET associated with the U.S.

federal government, which were materially reduced beginning in the first quarter of 2025 as a result of government efficiency actions, were stable.

Throughout the first quarter, we continued to align resources with demand to address these dynamics and maintained a disciplined approach to expense management overall as part of our ongoing focus on efficiency.

With trends stabilizing across the enterprise, we continued to execute strategic initiatives designed to drive organic growth and margin expansion.

These include the formation of a Growth Office which has collaborated across the enterprise to lay the foundation for an integrated commercial operating framework.

This framework unifies our go-to-market strategy, bringing our full suite of solutions to customers and increasing share of wallet and revenue growth.

We remained on track with our technology modernization initiative in the quarter, facilitating a smooth transition following the cutover of our acquisitions in SET from their legacy technology stack to the modernized platform we acquired through our acquisition of MRP.

The learnings from the initial cutover are being applied to subsequent phases to ensure we fully realize the growth and efficiency benefits of the new technology stack.

Our ability to stabilize the business while driving progress on our strategic initiatives in the first quarter reflects our enhanced focus on execution and operational discipline.

As demand trends improve, our progress will position us to capitalize, driving profitable growth and long-term value creation.

Financial Measures

Reported percentage changes were computed based on actual amounts in thousands of dollars.

EBITDA (earnings before interest, taxes, depreciation and amortization) and EBITDA margin (EBITDA divided by revenue from services) are measures used for understanding our ability to generate cash flow and for judging overall operating performance.

EBITDA measures are non-GAAP (U.S.

Generally Accepted Accounting Principles) measures and are used to supplement measures in accordance with GAAP.

Our non-GAAP measures may be calculated differently from those provided by other companies, limiting their usefulness for comparison purposes.

Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

Reported percentage changes are computed based on millions.

Prior year percentage changes were computed based on actual amounts in thousands.

Prior year percentage changes have been recast to conform to the new presentation, which is calculated based on millions.

All dollar amounts are presented in millions, except for per share data.

Days sales outstanding (“DSO”) represents the number of days that sales remain unpaid for the period being reported.

DSO is calculated by dividing average net sales per day (based on a rolling three-month period) into trade accounts receivable, net of allowances at the period end.

DSO is calculated by dividing average net sales per day (based on a rolling three-month period) into trade accounts receivable, net of allowances at period end.

Although secondary supplier revenues are recorded on a net basis (net of secondary supplier expense), secondary supplier revenue is included in the daily sales calculation in order to properly reflect the gross revenue amounts billed to the customer.

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(in millions)

Third Quarter September Year-to-Date

2025 2024 % Change 2025 2024 % Change

First Quarter

2026 2025 % Change

Revenue from services $ 1,040.7 $ 1,164.9 (10.7)%

Gross profit 196.4 236.5 (17.0)

SG&A expenses excluding integration, realignment, and restructuring charges and depreciation and amortization 178.7 198.6 (10.0) 569.7 551.3 3.3

SG&A expenses excluding integration, realignment, restructuring charges, and depreciation and amortization 182.9 202.2 (9.5)

Integration, realignment and restructuring charges 4.7 10.7 (56.1)

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Total SG&A expenses 199.3 225.7 (11.7)

Goodwill impairment charge 102.0 — NM 102.0 — NM

(Gain) loss on sale of EMEA staffing operations (0.3) — NM (4.3) (1.6) (169.4)

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

Asset impairment charge — — NM — 5.5 NM

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

Gain on forward contract — — — — 1.2 NM

Asset impairment charge 2.2 — NM

Earnings (loss) from operations (5.1) 10.8 NM

Other income (expense), net (1.6) (3.2) 50.0

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

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

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

Gross profit rate 20.8 % 21.4 % (0.6) pts.

20.5 % 20.4 % 0.1 pts.

Third Quarter Results

Revenue from services in the third quarter decreased 9.9% year-over-year with decreases in the ETM and SET segments, partially offset by an increase in the Education segment.

Compared to the third quarter of 2024, revenue from staffing services decreased 10.3% and revenue from outcome-based services decreased 13.1%.

Revenue from talent solutions decreased 1.4% and permanent placement revenue decreased 13.2% from the prior year.

Gross profit decreased 12.5%, primarily driven by lower revenue volume.

The gross profit rate decreased 60 basis points to 20.8%, primarily due to a 50 basis point decrease due to employee-related costs and a 10 basis point decrease related to business mix.

Total SG&A expenses decreased 11.2%, primarily due to expense management actions to reduce volume-related costs and reflects the benefits of the ongoing integration and realignment efforts.

SG&A expenses in the third quarter of 2025 include $3.1 million of integration and realignment costs related to initiatives to integrate MRP and other prior acquisitions, consolidating operating segments, and further aligning processes and technology across the Company, $0.8 million of executive transition charges and $0.4 million of transaction costs related to the sale of our EMEA staffing operations.

Included in SG&A expenses in the third quarter of 2024 were $6.1 million of integration and realignment costs related to initiatives to integrate MRP and aligning Company processes and $0.2 million of transformation and restructuring adjustments relating to 2023 initiatives and $3.1 million of transaction-related costs arising from the sale of our EMEA staffing operations and acquisition of MRP.

Excluding integration and realignment, transaction, executive transition, restructuring and transformation charges, and depreciation and amortization, SG&A expenses decreased 9.2% from the prior year.

The loss from operations in the third quarter was primarily due to the goodwill impairment charges driven by reduced demand, integration of MRP and Softworld acquisitions and realignment of reporting units in the SET segment.

Income tax expense was $46.4 million for the third quarter of 2025 compared to an income tax benefit of $2.6 million for the third quarter of 2024, with the change primarily driven by the valuation allowance and goodwill impairment charges.

September Year-to-Date Results

Revenue from services in the first nine months of 2025 increased 1.9%, which was primarily driven by the acquisition of MRP in May 2024.

Excluding the impact from the acquisitions, revenue from services decreased 4.2% year-over-year with decreases in the ETM and SET segments, partially offset by an increase in the Education segment.

Compared to the first nine months of 2024 and excluding the impact from the acquisitions, revenue from staffing services decreased 4.3% and revenue from outcome-based services decreased 6.2% from the prior year.

Revenue from talent solutions increased 1.8% and permanent placement revenue decreased 19.0% from the prior year, excluding the impact from the acquisition.

Gross profit increased 2.3%, largely driven by the acquisition of MRP.

Excluding the impact from the acquisition, gross profit decreased 6.3%.

The gross profit rate increased 10 basis points to 20.5%, primarily due to a 50 basis point increase due to the acquisition of MRP, partially offset by a 30 basis point decrease related to business mix and other and a 10 basis point decrease related to lower permanent placement fees.

The gross profit rate decreased in the ETM and SET segments, excluding the MRP acquisition, and increased in the Education segment.

Total SG&A expenses increased 4.4%, primarily due to the acquisition of MRP.

Excluding the impact of the acquisition, SG&A expenses decreased 3.9%.

SG&A expenses in the first nine months of 2025 include $19.8 million of integration and realignment costs related to initiatives to integrate MRP and other prior acquisitions, consolidating operating segments, and further aligning processes and technology across the Company, $1.3 million of executive transition charges and $0.8 million of transaction costs, of which $0.5 million were related to the sale of our EMEA staffing operations.

Included in SG&A expenses in the first nine months of 2024 were $12.5 million of integration costs related to initiatives to integrate MRP and aligning Company processes and transformation and restructuring charges relating to 2023 initiatives, and $10.3 million of transaction costs related to the sale of our EMEA staffing operations.

Excluding the impact from the acquisition, as well as integration and realignment, transaction, executive transition, restructuring and transformation charges, and depreciation and amortization, SG&A expenses were down 2.9% from the prior year.

The loss from operations in the first nine months of 2025 was primarily due to the goodwill impairment charges driven by reduced demand, integration of MRP and Softworld acquisitions and realignment of reporting units in the SET segment.

The gain on sale of EMEA staffing operations relates to the January 2024 sale.

In the first nine months of 2025, we recognized a gain of $4.3 million upon the settlement of working capital and other adjustments and previously recognized a gain of $1.6 million in the first nine months of 2024.

The gain on sale of assets represents the sale of Ayers Group in the second quarter of 2024 for which we recognized a gain of $5.4 million in the first nine months of 2024.

Income tax expense was $49.1 million for the first nine months of 2025 compared to an income tax expense of $2.5 million for the first nine months of 2024, with the change primarily driven by the valuation allowance and goodwill impairment charges.

Earnings (loss) before taxes (6.7) 7.6 NM

Income tax expense (benefit) (0.8) 1.8 (144.4)

Net earnings (loss) $ (5.9) $ 5.8 NM

Gross profit rate 18.9 % 20.3 % (1.4)%

First Quarter Results

Revenue from services in the first quarter decreased 10.7% year-over-year with decreases in the ETM, SET, and Education segments.

Compared to the first quarter of 2025, revenue from staffing services and outcome-based services decreased 12.9% and 9.7%, respectively.

Revenue from talent solutions increased 3.0% and permanent placement revenue decreased 5.2% from the prior year.

Gross profit decreased 17.0% year-over-year, primarily driven by lower revenue volume.

The gross profit rate decreased 1.4% to 18.9%, primarily due to higher employee-related costs in the beginning part of the year.

Total SG&A expenses decreased 11.7% year-over-year, primarily due to expense management actions to reduce volume-related costs and reflects the benefits of the ongoing structural actions including integration and realignment efforts.

SG&A expenses in the first quarter of 2026 include $4.7 million of integration and realignment costs related to continuation of ongoing initiatives, $1.5 million of executive transition charges and $0.8 million of transaction costs primarily related to costs incurred in connection with our controlling shareholder change in the first quarter of 2026.

Included in SG&A expenses in the first quarter of 2025 were $10.7 million of integration and realignment costs related to initiatives to integrate MRP and align our processes and $0.3 million of executive transition charges and $0.3 million of transaction-related costs arising from the sale of our EMEA staffing operations.

Excluding integration and realignment, transaction, executive transition charges, and depreciation and amortization, SG&A expenses decreased 9.5% from the prior year.

The asset impairment charge of $2.2 million in the first quarter of 2026 relates to certain right-of-use assets and reflects our ongoing realignment of our lease portfolio.

Income tax benefit was $0.8 million for the first quarter of 2026 compared to income tax expense of $1.8 million for the first quarter of 2025, driven by changes in pretax income and the benefit of work opportunity tax credits in the first quarter of 2025.

Operating Results By Segment

(in millions)

Third Quarter September Year-to-Date

2025 2024 % Change 2025 2024 % Change

First Quarter

2026 2025 % Change

Revenue from Services:

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Consolidated Total $ 1,040.7 $ 1,164.9 (10.7)%

Third Quarter Results

The decrease in ETM revenue of 13.1% was primarily related to a decrease of 16.4% in staffing services resulting from lower hours volume primarily at certain large customers and a decrease of 17.2% from outcome-based services primarily due to the ramping down of a large contact-center customer that has fully ended as of the third quarter of 2025.

First Quarter Results

The decrease in ETM revenue from services of 13.2% was primarily driven by a decrease of 16.9% in staffing services resulting from lower hours volume primarily at certain large customers and a decrease of 19.8% from outcome-based services primarily due to the relationship exit of a large contact-center customer that ended as of the third quarter of 2025.

Permanent placement fees decreased 21.7%, reflecting lower market demand.

These decreases were partially offset by an increase of 3.0% in talent solutions driven by new customer wins and volume increases.

The decrease in SET revenue from services of 11.6% was primarily driven by declines in hours volume in our staffing specialties, largely from changes in demand related to U.S.

federal government contractors.

Revenue in our outcome-based services decreased 8.4% primarily due to lower project demand including from the U.S.

Federal Government.

Permanent placement fees decreased 13.3%, reflecting continued lower market demand.

The increase in Education revenue from services was driven primarily by the impact of ongoing improved fill rates.

September Year-to-Date Results

ETM revenue includes the impact from the acquisition of Sevenstep, the MRP talent solutions business.

Revenue excluding the acquisition decreased 6.1%.

Revenue from staffing services decreased 8.7%, resulting from lower hours volume primarily at certain large customers and revenue from outcome-based services decreased 7.2%, primarily due to the ramping down of a large contact-center customer that has fully ended as of the third quarter of 2025, which was offset by an increase of 1.8% in talent solutions, excluding the acquisition.

The increase in SET revenue from services was primarily driven by the acquisition of MRP staffing and outcome-based solutions businesses.

Excluding the acquisition, revenue from services decreased 8.2%, primarily driven by declines in hours volume in our staffing specialties largely from changes in demand related to U.S.

federal government contractors.

Excluding the acquisition, revenue in our outcome-based services decreased 4.7%.

Permanent placement fees decreased, reflecting continued lower market demand.

The increase in Education revenue from services was driven by the impact of higher fill rates and higher bill rates on stable demand for our services as compared to a year ago, partially offset by the impact of weather-related school closures early in the year.

Operating Results By Segment (continued)

(in millions)

Third Quarter September Year-to-Date

2025 2024 Change 2025 2024 Change

federal government contractors and IT services, partially offset by an increase in permanent placement fees.

The decrease in Education revenue from services of 4.8% was driven primarily by the impact of delayed contract decisions, weather-related school closures and a reduction in demand in key markets due to declines in student enrollment.

First Quarter

2026 2025 % Change

Gross Profit:

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Gross Profit Rate:

Enterprise Talent Management 19.8 % 20.4 % (0.6) pts.

20.0 % 20.3 % (0.3) pts.

Enterprise Talent Management 18.6 % 20.3 % (1.7)%

Science, Engineering & Technology 24.8 25.4 (0.6)

Education 13.3 15.0 (1.7)

Consolidated Total 20.8 % 21.4 % (0.6) pts.

20.5 % 20.4 % 0.1 pts.

Third Quarter Results

Consolidated Total 18.9 % 20.3 % (1.4)%

First Quarter Results

Gross profit for ETM decreased on lower revenue volume.

Factors impacting the gross profit rate included the impact of higher employee-related costs, partially offset by changes in business mix, which reduced the gross profit rate by 60 basis points.

The gross profit rate decreased by 1.7% primarily due to higher employee-related costs and lower permanent placement fees, partially offset by favorable changes in business mix.

The SET gross profit decreased on lower revenue volume.

Factors impacting the gross profit rate included the impact of changes in business mix and higher employee-related costs, which reduced the gross profit rate by 70 basis points and a 10 basis point decrease as a result of lower permanent placement fees.

Gross profit for the Education segment increased on higher revenue volume.

Factors impacting the gross profit rate included the impact of lower employee-related costs, which increased the gross profit rate by 10 basis points and a 10 basis point increase as a result of higher permanent placement fees.

September Year-to-Date Results

Gross profit for the ETM segment decreased on lower revenue volume.

Factors impacting the gross profit rate included the impact of changes in business mix and higher employee-related costs, which reduced the gross profit rate by 40 basis points, partially offset by a 10 basis point increase due to the addition of the Sevenstep business.

The SET gross profit increased primarily due to the acquisition of the MRP staffing and outcome-based solutions businesses.

SET gross profit rate is flat compared to prior year and reflects the benefit of the MRP acquisition, which generates higher gross profit rates, offset by lower permanent placement fees and unfavorable changes in business mix.

Gross profit for the Education segment increased 20 basis points on higher revenue volume.

The gross profit rate increased due primarily to lower employee-related costs.

The gross profit rate decreased by 0.6% primarily due to higher employee-related costs, partially offset by higher permanent placement fees.

Gross profit for the Education segment decreased on lower revenue volume.

The gross profit rate decreased by 1.7%, primarily due to higher employee-related costs as well as reductions due to changes in business mix and lower permanent placement fees.

Operating Results By Segment (continued)

(in millions)

Third Quarter September Year-to-Date

2025 2024 % Change 2025 2024 % Change

First Quarter

2026 2025 % Change

SG&A Expenses (excluding depreciation and amortization):

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Consolidated Total $ 187.6 $ 212.9 (11.9)%

Third Quarter Results

The decrease in SET SG&A expenses excluding depreciation and amortization was primarily due to lower employee-related costs as a result of expense management actions in response to lower revenue volume compared to the prior year.

The increase in Education SG&A expenses excluding depreciation and amortization primarily related to increased costs to support year-over-year revenue growth.

The decrease in Corporate expenses was primarily driven by lower employee-related costs, integration and realignment charges and transaction costs in the third quarter of 2025 as compared to prior year.

September Year-to-Date Results

The decrease in ETM SG&A expenses excluding depreciation and amortization was primarily due to lower employee-related costs as a result of expense management actions in response to lower revenue volume compared to the prior year, partially offset by the addition of the Sevenstep business and integration and realignment charges.

Excluding the acquisition, expenses decreased 4.4% from the prior year.

The increase in SET SG&A expenses excluding depreciation and amortization was primarily due to the acquisition of MRP.

Excluding the acquisition, expenses decreased 4.4% from the prior year.

The increase in Education SG&A expenses excluding depreciation and amortization primarily related to increased costs to support year-over-year revenue growth.

The decrease in Corporate expenses was primarily driven by lower employee-related costs and transaction costs, partially offset by an increase in integration and realignment charges in the first nine months of 2025 as compared to prior year.

Operating Results By Segment (continued)

(in millions)

Third Quarter September Year-to-Date

2025 2024 % Change 2025 2024 % Change

First Quarter Results

The 14.0% decrease in ETM SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs, lower performance-based incentive compensation, and lower shared service costs as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year.

The 16.6% decrease in SET SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs and performance-based incentive compensation as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year.

The 0.7% decrease in Education SG&A expenses excluding depreciation and amortization primarily related to lower performance-based incentive compensation.

The 3.1% increase in Corporate expenses was primarily driven by investment in the Growth Office and other corporate initiatives and increases in our nonqualified compensation plan expense, partially offset by lower integration, realignment, and restructuring charges and performance-based incentive compensation in the first quarter of 2026 as compared to the prior year.

First Quarter

2026 2025 % Change

Business Unit Profit (Loss)

Enterprise Talent Management $ 9.1 $ 18.0 (48.9) % $ 27.0 $ 41.6 (34.8) %

Science, Engineering & Technology (82.4) 19.5 NM (49.7) 52.6 NM

Enterprise Talent Management $ (1.3) $ 6.3 NM

Science, Engineering & Technology 12.0 13.9 (13.7)

Education 12.3 19.3 (36.3)

Business Unit Profit (Loss) (77.7) 34.2 NM 5.8 121.7 (95.3)

Business Unit Profit (Loss) 23.0 39.5 (41.8)

Corporate (16.4) (15.9) 3.1

Asset impairment charge — — NM — (5.5) NM

Gain (loss) on sale of EMEA staffing operations 0.3 — NM 4.3 1.6 (169.4)

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

Depreciation and amortization (11.7) (12.8) (8.6)

Consolidated Total Earnings (loss) from Operations $ (102.1) $ 2.6 NM % $ (69.1) $ 41.6 NM %

Third Quarter Results

ETM reported profit decreased versus the prior year primarily due to lower revenue and gross profit, partially offset by lower SG&A expenses.

SET reported profit (loss) decreased versus the prior year primarily due to the goodwill impairment charge.

Excluding the goodwill impairment charge, SET reported profit was flat compared to the prior year.

Education reported profit decreased versus the prior year primarily driven by an increase in SG&A expenses, partially offset by higher revenue and gross profit.

Corporate expenses decreased over the prior year primarily driven by lower employee-related costs, integration and realignment charges and transaction costs in the third quarter of 2025.

September Year-to-Date Results

ETM reported profit decreased versus the prior year primarily due to lower revenue and gross profit, partially offset by lower SG&A expenses.

These results include the impact from the addition of the Sevenstep business.

SET reported profit (loss) decreased versus the prior year primarily due to the goodwill impairment charge.

Excluding the impairment charge, SET profit was up 2.4% from the prior year.

Excluding the MRP acquisition and goodwill impairment charge, the decrease in profit was due primarily to lower revenue and gross profit.

Education reported profit increased versus the prior year primarily driven by higher revenue and gross profit, partially offset by an increase in SG&A expenses.

Corporate expenses decreased over the prior year primarily driven by lower employee-related costs and transaction costs, partially offset by an increase in integration and realignment charges in 2025.

Consolidated total earnings (loss) from operations $ (5.1) $ 10.8 NM

First Quarter Results

ETM reported a loss of $1.3 million compared to profit of $6.3 million in the prior year.

SET and Education reported profit of $12.0 million and $12.3 million, respectively, which decreased compared to the prior year.

Declines in business unit profit (loss) are primarily due to lower revenue and gross profit, partially offset by lower SG&A expenses.

Financial Condition

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however, any such increase would not be sustainable in the event that an economic downturn continued for an extended period.

We also experience seasonal reductions in working capital usage in our Education business related to the summer school holidays.

As highlighted in the consolidated statements of cash flows, our liquidity and available capital resources are impacted by four key components:

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Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash totaled $35.4 million at the end of the third quarter of 2025 and $45.6 million at year-end 2024.

As further described below, we generated $94.0 million of cash from operating activities, generated $21.9 million of cash from investing activities and used $131.4 million of cash for financing activities.

Cash, cash equivalents and restricted cash totaled $29.5 million at the end of the first quarter of 2026 and $37.7 million at year-end 2025.

As further described below, we used $25.4 million of cash for operating activities, used $1.2 million of cash for investing activities and generated $24.2 million of cash from financing activities.

Operating Activities

In the first nine months of 2025, we generated $94.0 million of net cash from operating activities, as compared to generating $11.9 million in the first nine months of 2024, primarily due to decreased working capital requirements as compared to the same period of the prior year.

Trade accounts receivable totaled $1.2 billion at the end of the third quarter of 2025.

Global DSO was 66 days at the end of the third quarter of 2025 and 59 days at year-end 2024.

Our working capital position (total current assets less total current liabilities) was $473.3 million at the end of the third quarter of 2025, a decrease of $65.7 million from year-end 2024.

Excluding the decrease in cash, working capital decreased $56.8 million from year-end 2024, primarily driven by the use of cash to pay down long-term debt.

The current ratio (total current assets divided by total current liabilities) was 1.6 at the end of the third quarter of 2025 and 1.7 at year-end 2024.

In the first three months of 2026, we used $25.4 million of net cash for operating activities, as compared to generating $23.9 million in the first three months of 2025, primarily due to increased working capital requirements as compared to the same period of the prior year.

Trade accounts receivable totaled $1.2 billion at the end of the first quarter of 2026.

Global DSO was 64 days for the first quarter of 2026 and 61 days at year-end 2025.

Our working capital position (total current assets less total current liabilities) was $480.2 million at the end of the first quarter of 2026, an increase of $33.7 million from year-end 2025.

The current ratio (total current assets divided by total current liabilities) was 1.6 at the end of the first quarter of 2026 and 1.5 at year-end 2025.

Investing Activities

In the first nine months of 2025, we generated $21.9 million of cash from investing activities, as compared to using $355.5 million in the first nine months of 2024.

Included in cash from investing activities in the first nine months of 2025 is $21.8 million of cash from the sale of EMEA staffing operations and $6.4 million of cash from the sale of the PersolKelly investment, partially offset by $6.8 million of cash used for capital expenditures.

Included in the cash used for investing activities in the first nine months of 2024 is $427.4 million used for the acquisition of MRP, $9.1 million of cash used for capital expenditures and a $2.4 million payment for the settlement of forward contracts.

These outflows were partially offset by $77.1 million of proceeds from the sale of EMEA staffing operations, net of cash disposed, and $4.3 million of proceeds from the sale of assets.

In the first three months of 2026, we used $1.2 million of cash for investing activities, as compared to generating $3.2 million in the first three months of 2025.

Cash used in investing activities in the first three months of 2026 is primarily driven by $1.1 million of capital expenditures.

Included in the cash generated for investing activities in the first three months of 2025 is $6.4 million of cash from the sale of PersolKelly investment, partially offset by $2.5 million of cash used for capital expenditures.

Financing Activities

We used $131.4 million of cash for financing activities in the first nine months of 2025, as compared to generating $217.3 million in the first nine months of 2024.

The change in cash used for financing activities was primarily driven by net payments of $121.0 million on our credit facilities in 2025 compared to net proceeds of $228.2 million on our credit facilities in 2024.

Dividends paid per common share were $0.075 in each of the first three quarters of 2025 and 2024.

We generated $24.2 million of cash from financing activities in the first three months of 2026, as compared to using $39.5 million in the first three months of 2025.

The change in cash generated from financing activities was primarily driven by net proceeds of $28.6 million on our credit facilities in 2026 compared to net repayments of $34.8 million on our credit facilities in 2025.

Dividends paid per common share were $0.075 in each of the first quarters of 2026 and 2025.

Debt-to-total capital (total debt reported in the consolidated balance sheet divided by total debt plus stockholders’ equity) is a common ratio to measure the relative capital structure and leverage of the Company.

Our ratio of debt-to-total capital was 9.1% at the end of the third quarter of 2025 and 16.2% at year-end 2024 .

Our ratio of debt-to-total capital was 11.9% at the end of the first quarter of 2026 and 9.4% at year-end 2025 .

Critical Accounting Estimates

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As part of those reviews, we may identify cash that we feel should be repatriated to optimize our overall capital structure.

As of the end of the third quarter of 2025, these reviews have not resulted in specific plans to repatriate a majority of our international cash balances.

Following the sale of our EMEA staffing operations completed in the first quarter of 2024, discussed below, we continue to provide MSP, RPO and Functional Service Provider solutions in the EMEA region.

Therefore, we expect much of our remaining international cash will be needed to fund working capital growth in our local operations.

As of third quarter-end 2025, we had $150.0 million of available capacity on our $150.0 million revolving credit facility and $89.0 million of available capacity on our $250.0 million securitization facility.

We expect our international cash will be needed to fund working capital growth in our local operations as working capital needs, primarily trade accounts receivable, increase during periods of growth.

As of first quarter-end 2026, we had $150.0 million of available capacity on our $150.0 million revolving credit facility and $76.9 million of available capacity on our $250.0 million securitization facility.

The revolving credit facility carried no long-term borrowings on the floating or term benchmark lines of credit.

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We believe our cash flow from operations, the availability of liquidity under our credit facilities, including the accordion feature which allows us to increase our borrowing capacity and our ability to access capital from financial markets will be sufficient to meet our anticipated cash requirements, while maintaining sufficient liquidity for normal operating purposes.

As of third quarter-end 2025, we met the debt covenants related to our revolving credit facility and securitization facility.

As of third quarter-end of 2025, we had additional unsecured, uncommitted short-term local credit facilities totaling $3.1 million, under which we had no borrowings.

As of first quarter-end 2026, we met the debt covenants related to our revolving credit facility and securitization facility.

As of first quarter-end of 2026, we had additional unsecured, uncommitted short-term local credit facilities totaling $3.1 million, under which we had no borrowings.

Details of our debt facilities are contained in the Debt footnote in the notes to our consolidated financial statements.

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Certain statements contained in this report and in our investor conference call related to these results are “forward-looking” statements within the meaning of the applicable securities laws and regulations.

Forward-looking statements include statements

which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” or variations or negatives thereof or by similar or comparable words or phrases.

Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” or variations or negatives thereof or by similar or comparable words or phrases.

In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions by us that may be provided by management, including oral statements or other written materials released to the public, are also forward-looking statements.

Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and assumptions about our Company and economic and market factors in the countries in which we do business, among other things.

These statements are not guarantees of future performance, and we have no specific intention to update them, except as required by law.

Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors.

The principal important risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, (i) changing market and economic conditions, (ii) disruption in the labor market and weakened demand for human capital resulting from technological advances, loss of large corporate customers and government contractor requirements, (iii) the impact of laws and regulations (including federal, state and international tax laws), (iv) unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, (v) litigation and other legal liabilities (including tax liabilities) in excess of our estimates, (vi) our ability to achieve our business's anticipated growth strategies, (vii) our future business development, results of operations and financial condition, (viii) damage to our brands, (ix) dependency on third parties for the execution of critical functions, (x) conducting business in foreign countries, including foreign currency fluctuations, (xi) availability of temporary workers with appropriate skills required by customers, (xii) cyberattacks or other breaches of network or information technology security, and (xiii) other risks, uncertainties and factors discussed in this report and in our other filings with the Securities and Exchange Commission.

Actual results may differ materially from any forward-looking statements contained herein, and we undertake no duty to update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

Certain risk factors are discussed more fully under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K.

These statements are not guarantees of future performance, and we undertake no obligation to update them, except as required by law.

Actual events and results may differ materially from those expressed or implied by forward-looking statements due to a number of factors.

The principal risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, (i) changing market and economic conditions, (ii) disruption in the labor market and weakened demand for human capital resulting from technological advances, competitive pressures and pricing, loss of large corporate customers and government contractor requirements, (iii) the impact of laws and regulations (including federal, state and international tax laws), (iv) unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, (v) litigation and other legal liabilities (including tax liabilities) in excess of our estimates, (vi) our ability to achieve our business's anticipated growth strategies, (vii) our future business development, results of operations and financial condition, (viii) damage to our brands, (ix) dependence on third parties for the execution of critical functions, (x) conducting business in foreign countries, including foreign currency fluctuations, (xi) availability of temporary workers with appropriate skills required by customers, (xii) cyberattacks or other breaches of network or information technology security, and (xiii) other risks, uncertainties and factors discussed in this report and in our other filings with the Securities and Exchange Commission, including those discussed under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 28, 2025.

Actual results may differ materially from any forward-looking statements contained herein, and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

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 2. Management’s Discussion and Analysis