Company: KELYB
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000055135-25-000052
Chunk: 109

Company: KELLY SERVICES INC
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 109
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.0 39.0 (15.5)Gain on forward contract— — NM— 1.2 NMOther income (expense), net(2.3)(6.5)65.0 (5.5)(4.7)(15.8)Earnings before taxes19.9 5.7 249.1 27.5 35.5 (22.6)Income tax expense0.9 1.1 (23.8)2.7 5.1 (48.0)Net earnings$19.0 $4.6 314.7 %$24.8 $30.4 (18.3)%Gross profit rate20.5 %20.2 %0.3 pts.20.4 %19.9 %0.5 pts.

Second Quarter Results

Revenue from services in the second quarter increased 4.2%, which was primarily driven by the acquisition of MRP in May 2024.  Excluding the impact from the acquisitions, revenue from services decreased 3.3% year-over-year with decreases in the ETM and SET segments partially offset by an increase in the Education segment.  Compared to the second quarter of 2024 and excluding the impact from the acquisitions, revenue from staffing services decreased 3.4% and revenue from outcome-based services decreased 5.5%.  Revenue from talent solutions increased 2.3% and permanent placement revenue decreased 8.7% from the prior year, excluding the impact from the acquisition.

Gross profit increased 5.5% largely driven by the acquisition of MRP.  Excluding the impact from the acquisition, gross profit decreased 5.1%.  The gross profit rate increased 30 basis points to 20.5% primarily due to a 70 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.  Permanent placement revenue has very low direct costs of services and has a disproportionate impact on gross profit rates.  The gross profit rate decreased in the ETM and SET segments excluding the acquisition and was flat year-over-year in the Education segment.

Total SG&A expenses increased 8.2%, primarily due to the acquisition of MRP.  Excluding the impact of the acquisition, SG&A expenses decreased 2