Company: KELYB
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000055135-25-000080
Chunk: 112

Company: KELLY SERVICES INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 2
Chunk 112
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 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.

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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