Kforce third-quarter revenue rises 7.5% from a year earlier to $357.8 million, above its own guidance

Kforce Inc. reported third-quarter 2026 revenue of $357.8 million on Monday, up 7.5% from a year earlier and above the top of the $349 million to $357 million range the staffing firm set in July. Diluted earnings were $0.90 a share against $0.63, including a $0.12 gain on company-owned life insurance policies.

Technology flex does the heavy lifting

The Technology business produced $331.25 million of the quarter's $357.76 million in revenue, and Technology Flex — the staffing piece of it — rose 7.8% from a year earlier to $328.06 million and 2.5% from the second quarter. Billing days were 64 in the third quarter, 64 in the second quarter and 64 a year earlier, so the comparison needs no calendar adjustment. Hours worked in Technology increased to 3.6 million from 3.38 million.

Finance and accounting flex revenue was $23 million, up 4.6% year over year. Firmwide direct-hire revenue was $6.7 million on 309 placements at an average fee of $21,709, against 276 placements at $23,143 a year earlier.

“We are extremely pleased to deliver a quarter of accelerating revenue and earnings growth.” Chief Executive Joseph J. Liberatore, in the release, also cited “a year-over-year growth rate in our Technology business of nearly 8% that is roughly equivalent to our pre-pandemic compound annual growth rate.”

Margin gains lean on a life-insurance gain

Gross profit margin was 28.2%, 50 basis points better than a year earlier and 30 basis points below the second quarter, while flex gross margin was 26.8%. SG&A absorbed 21.6% of revenue, 120 basis points less than a year earlier, and the release attributes 60 basis points of that improvement to the gain on company-owned life insurance policies.

Operating margin of 6.3% was 180 basis points higher year over year and above the 5.3% to 5.7% range Kforce guided in July. Adjusted EBITDA was $27.48 million against $19.41 million, net income was $15.45 million against $11.07 million, and diluted earnings per share were $0.90 against $0.63, a 42.9% increase that the release says would have been 23.8% without the COLI gain.

Receivables and the revolver absorb the growth

The income statement's improvement did not reach the balance sheet. Cash and equivalents were $250,000 at September 30 against $2.14 million at December 31, trade receivables rose to $229.65 million from $190.46 million, and borrowings under the credit facility climbed to $107.9 million from $66.4 million.

Nine-month operating cash flow was $2.8 million against $41.94 million a year earlier, and free cash flow — operating cash flow less $10.83 million of capital spending — was negative $8.03 million against positive $30.14 million. Capital returns continued anyway: $20.23 million of dividends and $15.14 million of buybacks in the nine months, versus $41.45 million of repurchases a year earlier. The board declared a $0.40 quarterly dividend payable December 18 to holders of record December 4.

The release offers no explanation for the working-capital swing, and it makes no reference to analyst estimates, so nothing in it establishes a beat or miss against consensus.

A fourth-quarter guide that steps down as billing days shrink

Kforce guided fourth-quarter revenue to $352 million to $360 million, earnings per share to $0.62 to $0.70, gross margin to 27.8% to 28.0%, operating margin to 4.5% to 4.9% and SG&A to 22.8% to 23.0% of revenue, on 62 billing days, an effective tax rate of 28.7% and 17.4 million weighted average diluted shares. The quarter just ended had 64 billing days and 17.23 million diluted shares.

The revenue range straddles the $357.8 million just reported — its $352 million floor sits below it and its $360 million ceiling above it — and both ends are well above the $332.0 million Kforce recorded in the fourth quarter of 2025. Both ends of the earnings range sit below the $0.90 just reported and above the $0.30 a share the company reported a year earlier, which it adjusted to $0.43 for certain expenses.

Liberatore framed the demand backdrop cautiously: “We believe we are operating in an environment where many companies remain hesitant to add full-time staff and that broader uncertainty has further reinforced the need for agility.” The next dated evidence is the call Kforce scheduled for 5:00 p.m. ET on Monday, with prepared remarks posted on its investor relations site, followed by the fourth-quarter report, which last year was dated February 2.