Kforce Q2 2026: Revenue +4.5%, EPS +23.7% — Both Beat; Q3 Flex Growth Expected
KFRC has more than doubled off its 52-week low of $24.49.
Summary
Kforce reported Q2 2026 revenue of $349.3M (+4.5% YoY) and EPS of $0.73 (+23.7% YoY), both beating expectations. Management guided for continued Flex revenue growth in Q3, though Direct Hire is expected to decline seasonally.
Key Events · Earnings and Guidance · KFRC
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Q2 Revenue and EPS Beat
Revenue of $349.3M (+4.5% YoY) and diluted EPS of $0.73 (+23.7% YoY) both exceeded expectations, driven by a 4.1% increase in Flex revenue and a 27% jump in Direct Hire revenue.
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Gross Margin Expansion
Gross profit margin expanded 140 bps YoY to 28.5%, fueled by a 110 bps improvement in Flex gross margins (to 26.9%) and a greater mix of high-margin Direct Hire revenue.
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Q3 Guidance: Flex Growth, Direct Hire Dip
Management expects Technology Flex revenue to increase low single digits sequentially and mid single digits year over year; FA Flex to increase low single digits sequentially and year over year; Direct Hire to decrease due to seasonal impacts.
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Operating Cash Flow Turns Negative
Cash used in operating activities was $6.7M for H1 2026, compared to $18.6M provided in H1 2025, primarily due to a $30.8M increase in trade receivables as revenue trends improved.
Analysis · KFRC · Trade & Services
A strong Q2 2026 saw Kforce deliver revenue of $349.3 million and EPS of $0.73, both exceeding expectations. Meaningful gross margin expansion was fueled by better bill-pay spreads in Technology Flex and a higher mix of Direct Hire. Looking ahead, management guided for continued sequential Flex revenue growth in Q3, though Direct Hire is expected to dip seasonally. The quarter also brought a sharp swing to negative operating cash flow due to working capital build, and credit facility borrowings rose to $107.1 million. Adding a headwind to net income, the effective tax rate jumped to 30.5%. Overall, the results confirm improving demand trends in technology staffing, but the cash flow and tax rate warrant attention.
At the time of this filing, KFRC was trading at $59.06 on NYSE in the Trade & Services sector, with a market capitalization of approximately $1.1B. The 52-week trading range was $24.49 to $61.68. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.